Bearish Trend and "Sell on Rise" Strategy
The Nifty 50 Index, currently trading at 22,419.95, is exhibiting a bearish trend in the near term. Chart analysis suggests that the optimal trading strategy for capitalizing on this trend is "sell on rise." This strategy involves selling the index when prices experience upward movement, taking advantage of temporary rallies within the overall downward trend.
A suitable stop-loss level could be placed at 22,675, providing a buffer against potential losses if the market unexpectedly reverses direction. Key support levels to monitor include 22,100, 21,950, 21,875, 21,575, and 21,250. These levels represent areas where downward momentum may slow or reverse temporarily, potentially offering opportunities for profit-taking or adjustments to trading positions.
Technical indicators such as the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and near-term Exponential Moving Averages (EMAs) are signaling bearish momentum and expected underperformance. Therefore, selling on rallies or booking profits on index positions aligns with these indicators and the overall bearish outlook.
Resistance and Support Levels
The Nifty Midcap Select Index, currently priced at 10,973.75, is encountering stiff resistance within the range of 11,030 – 11,125. Conversely, a support is anticipated in the range of 10,700 – 10,500. Movements above or below these ranges could potentially catalyze further market momentum, making them critical levels to monitor closely.
Given the technical indicators, which are currently displaying a flat stance for the near term, market participants may need to exercise patience to gain clarity on future price action. During periods of uncertainty, it is often prudent to wait for a breakout before committing to trading positions.
Disclaimer
This information is provided by Ravi Nathani, an independent technical analyst. Views expressed are his own and do not constitute an offer or solicitation for the purchase or sale of any security. It should not be construed as a recommendation to purchase or sell such securities.