Nifty Financial Services Index
Last close: 18,371.60 (Range Bound)
The Financial Services index, which is currently trading at a level of 18,371.60, exhibited robust fortification as evidenced by the utilization of the Pivot Level technical indicator. The index established support at 50 per cent region situated between the S1 and Pivot, which is just above the pivot value of 18,353.
Such price behavior implies that the index is likely to persist within a circumscribed range for a substantial duration, in the range between R1 (19000) and S1 (17450). A decisive violation of this range, in either direction, shall provide a clear indication of a trend reversal and offer a further trajectory of the trend.
A sharp rally of over 4 per cent that was observed in the preceding three trading sessions portends that the imminent trend is likely to be bullish. Moreover, the bullish momentum is reinforced by the convergence of MACD signal line and price line, which exhibits an upward slope and imminent to intersect.
In light of these considerations, it is advisable that traders adopt a strategy of purchasing near support and selling near resistance, as previously described until a decisive trend reversal or breakdown transpires.
No Trade Zone for Intraday: 18,320 – 18,420
Expected Intraday Resistance: 18,475 – 18,550 – 18,781
Expected Intraday Support: 18,281 – 18,200 – 18,050
PSU Bank Index
Last close: 3,898.20 (Sell on the rise)
The chart analysis of the PSU Bank Index exhibits a persistent pattern of decreased peak and trough levels, thereby, dictating that a prudent trading strategy for traders would be to sell the index on the rise.
As per the principle of price action, a substantial resistance level is anticipated to be in the vicinity of 4,025 to 4,120, with a difference of 95 points being a crucial juncture for this index, as a breach of this level would likely lead to a higher trajectory with subsequent resistance levels in the range of 4,250 to 4,330.
However, it must be noted that a definitive change in trend is only probable with the index closing above 4,420. Until then, the prevailing bearish trend, marked by decreased peak and trough levels, shall be considered as a sell-on-rise pattern.
No Trade Zone for Intraday: 3875 – 3925
Expected Intraday Resistance: 3949 – 3981 – 4050
Expected Intraday Support: 3860 – 3816 – 3750
(Ravi Nathani is an independent technical analyst. Views expressed are personal).
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