Nifty Financial Services in ‘overbought’ zone; PSU Bank eyeing pullback
Source: Business Standard
NIFTY Financial Services Index
The NIFTY Financial Services Index, which rallied recently, is now consolidating within a narrow range of 24,000 to 23,950. A breakout above or below this range could trigger momentum in the corresponding direction. Currently, the technical indicators and chart patterns suggest that the index is in an overbought zone, indicating that a correction or pullback is likely in the short term. Given this market condition, the best strategy for traders and investors would be to book profits on any rise as the index appears to be poised for a deeper correction.
A pullback to the support levels of 23,500, 23,300, and 23,100 would present ideal opportunities to buy the index and its constituents for a short-term gain. These levels should be closely monitored, as they offer favorable entry points for long positions once the correction completes.
NIFTY PSU Bank Index
The NIFTY PSU Bank Index is currently showing a downtrend in the near term, indicating a temporary pullback within its overall long-term bullish trend. The support levels on the charts are expected at 6,570 and 6,300, which present key areas where the index could stabilise before resuming its upward momentum. For traders and investors, the best strategy would be to wait for the index to approach these support levels before starting to accumulate positions.
The current pullback is seen as a corrective phase, offering an opportunity to enter the market at favorable prices. Once the index stabilises around 6,570 or 6,300, traders can consider accumulating the index and its constituents for short-term gains. Despite the near-term weakness, the long-term outlook remains bullish, and this pullback is part of the broader trend.
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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: Sep 17 2024 | 6:35 AM IST
