Nifty50, MidCap Select index show promising setups: Check trading strategy
Source: Business Standard
Nifty 50 Index: Buy on Dips Amid Range-Bound Movement
Indicators such as RSI, Stochastic, and MACD are currently positioned in the oversold zone, signaling that a recovery is likely. Typically, in a range-bound market, the strategy would be to buy near support and sell near resistance. However, given the technical setup, this time presents an opportunity to accumulate the index and its constituents on dips, especially near the lower end of the range.
The oversold condition in key indicators implies that any downward move would offer a buying opportunity rather than a selling one. If the lower level of the range at 24700 is broken, it is likely to trigger a positive move on the RSI, further enhancing the possibility of a bullish divergence on RSI resulting a buy for near term.
The overall outlook is optimistic, with the potential for outperformance by the end of the week. Traders should focus on buying into dips and accumulating positions in anticipation of a recovery and near-term bullish movement.
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Nifty Midcap Select Index: Buy with Strict Stoploss
On the upside, the index is expected to face resistance at 13180, 13275, and 13575, which are ideal levels for booking profits. However, a close below 12850 would signal weakness, and in that case, the next support levels would be 12525 and 12400. If the index enters the oversold zone, marked between 12275 and 12200, it could offer an even stronger buying opportunity for swing traders.
Given the expected outperformance of the Nifty Midcap Select Index, traders should focus on buying on dips or accumulating positions at current levels, targeting the resistance points for short-term profits. The technical outlook remains positive as long as the 12850 level holds.
Conclusion
The Nifty Midcap Select Index, with a strict stoploss of 12,850, is poised for a near-term outperformance, with traders advised to target resistance levels for booking profits.
(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: Oct 14 2024 | 7:30 AM IST
