Nifty Bank to outperform in near term; buy on dips? What analysts say
Nifty Bank Index
The Nifty Bank Index is currently exhibiting a positive trend on the charts, and it has closed right at the edge of a potential breakout. A close above 50,850 would signal a bullish breakout, suggesting that the index could see a strong upward movement. The next resistance levels and target prices to watch are 51,500, 51,950, and 52,500.
Technical indicators such as MACD (Moving Average Convergence Divergence) and Moving Averages also support the expectation that the index will outperform in the near term. Given these conditions, the best trading strategy for traders would be to buy on dips, aiming for the above-mentioned targets. To manage risk, traders should place a stop-loss at 50,150 on a closing basis. This strategy allows traders to capitalise on the anticipated bullish momentum while protecting against potential downside risks.
Nifty PVT Banks Index
The Nifty PVT Banks Index has recently given a breakout on the charts, signalling a bullish momentum that is likely to continue in the near term. The index is expected to reach the target levels of 25,750, 25,950, and 26,250. Additionally, a trade above 25,500 would further strengthen the bullish momentum, adding an additional trigger to the upward movement.
Given this breakout and the bullish outlook, the best trading strategy would be to buy on dips. This approach allows traders to take advantage of the ongoing momentum while positioning themselves for potential gains as the index continues to rise. The breakout indicates strong underlying strength, and traders should be prepared to act on pullbacks to maximise their opportunities.
Conclusion
(Disclaimer: Ravi Nathani is an independent technical analyst. Views are his own. He does not hold any positions in the Indices mentioned above and this is not 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.)
First Published: Aug 21 2024 | 6:33 AM IST
