Tech View: Nifty Midcap 50 Index Likely to Range Consolidate

Bias: buy on dips

The current market price (CMP) of the Nifty Energy Index is 23,185.25, and its short-term trend is seen to be bullish based on chart analysis, indicating an expected short-term bullish trend.

To take advantage of this trend, traders can implement the dip-buying strategy, which involves buying stocks at a lower market price and selling them when the price rises.

The strategy target is expected to be 23,750 and 24,000. However, to minimize the risks associated with this trading strategy, it is recommended to implement a stop loss mechanism. The stop-loss order ensures that shares are sold when the market price falls below a certain level, thus limiting potential losses.

For the current trading strategy, the stop-loss should be implemented below 22,900. If the Nifty Energy Index trades below the stop-loss level of 22,900, the next support levels on the charts could be expected around 22,525 and 22,100.

In short, the Nifty Energy Index shows a short-term uptrend, and traders can use the dip-buy strategy to take advantage of it, with a target of 23,750 and 24,000. However, to mitigate the risks, a stop-loss mechanism should be implemented below 22,900. If the index trades below this level, next support levels could be expected around 22,525 and 22,100.

Nifty MID-CAP 50 Index

With a current market price (CMP) of 8,762.90, the Nifty MID-CAP 50 Index is expected to trade within a specified price range for a period after a strong rally on the charts, suggesting a way to limited range.

Trading above or below the expected range of 8800 – 8736 could trigger a move in the direction of the breakout, which refers to a sudden increase or decrease in the market price that indicates a potential trend change.

If the index trades above the expected range, it is expected to face selling interest at the next resistance level on the charts around 8,935 – 9,150, preventing further appreciation.

Conversely, if the lower end of the expected range of 8736 is broken, the index is forecast to find buying interest at the next support levels on the charts around 8575 – 8500 – 8425, avoiding further decline.

To optimize trading in the current market scenario, the best strategy for traders would be to wait for a breakout and subsequent breach before initiating trade in the breakout direction, allowing for a sudden increase or decrease in the market price to indicate a potential trend. change.

In summary, the Nifty MID-CAP 50 Index is expected to be range bound in the near term, giving traders an opportunity to take advantage of this scenario by waiting for a breakout and then initiating trades in the direction of the breakout.

(Ravi Nathani is an independent technical analyst. Opinions expressed are personal.)