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Nifty FMCG Index Analysis
With technical indicators showing signs of being overextended, the prudent trading strategy would be to book profits on the rise and wait for a pullback to more favorable levels for fresh investments. Support levels on the charts are anticipated around 60,900, 60,300, and 59,300.
Fresh investments should be considered only when the index corrects to the aforementioned support levels, ensuring a better risk-reward ratio. By waiting for the pullback, traders can re-enter positions at more favorable prices, thereby maximizing potential gains while minimizing risk.
Nifty Auto Index Analysis
A decisive close above or below this range will likely trigger a significant move in the corresponding direction. If the index breaks above 25,900, it will face resistance at 26,300 and 26,800. Conversely, a close below 24,800 will find support at 24,100 and 23,800.
However, for risk-tolerant traders, a strategy of buying near the support levels and selling near the resistance levels can be employed. This strategy leverages the predictability of the range-bound behavior, allowing for profitable trades within these defined limits. Implementing a strict stop-loss based on the range breakouts is essential to manage potential risks effectively.
Summary
On the other hand, the Nifty Auto Index is trading within a defined range, offering opportunities for both cautious and risk-tolerant traders.
By waiting for a breakout or trading within the defined ranges, traders can capitalize on market movements while effectively managing risk. Monitoring key levels and adhering to strict stop-loss strategies will be crucial in navigating the near-term market conditions for both indices.
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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: Jul 19 2024 | 6:28 AM IST
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