Handy automatic index
The Nifty Auto Index, which is currently trading at a CMP (Current Market Price) of 20,372.35, is showing a downward trend in the charts in the short term. The expected support levels are around 20,200 and 19,850.
In light of this trend, the recommended trading strategy is to sell on rallies, with a strict stop-loss of 20,800 at the close.
Technical indicators, such as the short-term Exponential Moving Average (EMA) and the Relative Strength Index (RSI), indicate a downtrend. These indicators indicate that selling pressure is likely to continue during upward price movements.
Traders are advised to exercise caution and consider selling positions during rallies, in line with the prevailing trend. The identified support levels at 20,200 and 19,850 serve as crucial points for traders to keep an eye on. These levels can act as potential zones for rebounds or extended downward moves.
Implementing a strict stop-loss at 20,800 is essential for risk management as it provides a predefined exit point in case of adverse market movements.
In summary, the Nifty Auto Index is currently on a downward trend, and the recommended strategy is to sell during rallies. Traders should keep a close eye on the support levels at 20,200 and 19,850 while adhering to a strict stop-loss at 20,800 to manage risks effectively. The technical indicators further reinforce the idea of a downtrend and guide traders in their decision-making process.
Useful energy index
The Nifty Energy Index, which is currently trading at a CMP (Current Market Price) of 38,748.05, is showing a range-bound pattern on the charts, demarcated by levels at 40,150 on the upside and 37,850 on the downside.
Breaking or closing above or below this range is considered a trigger point, indicating possible directional movement.
Considering the technical indicators such as MACD, RSI and short-term EMAs that signal a downtrend, indicating a tendency towards selling pressure, the suggested trading strategy is to book profits on rallies. This involves taking advantage of upward movements to sell, anticipating a possible downturn.
Chart support is expected around 35,700, and careful observation is recommended if the index breaks and closes below the lower range at 37,850. This level becomes critical as it could signal a shift in the prevailing trend.
For traders with a higher risk tolerance, going short at the current market price is an option. However, for safer trading practices, it is advised to wait for a confirmed breakdown below 37,850 before taking positions.
To summarize, the Nifty Energy Index is currently between 40,150 and 37,850. Booking profits on rallies is preferable given the downtrend signaled by technical indicators. Traders are advised to keep a close eye on the critical support level at 37,850, with riskier traders considering short positions at the current market price and safer traders waiting for a confirmed breakdown.
(Ravi Nathani is an independent technical analyst. Opinions expressed are personal).
First print: February 29, 2024 | 6:32 am IST