Charts suggest Nifty Energy index could bounce back, says Ravi Nathani

According to the technical analyst, in the past four days, the Nifty Energy index appears to be encountering resistance at 22,650, and a violation of this level could signal the start of accumulation

Nifty Energy
Last close: 22,499.75

Given the current market conditions and the recent sharp correction experienced by the Nifty Energy index, it is projected that the index is preparing for a technical bounce. This, thereby, could result in a potential rally that could take the index up to 24,550.

Observing the trend over the past four trading sessions, the index appears to be encountering resistance at 22,650, and a violation of this level could signal the start of accumulation.

In light of these observations, the recommended trading strategy for traders is to accumulate the index at lower levels. This will enable traders to capitalise on the potential technical bounce and generate profits accordingly.

No Trade Zone: 22,555 – 22,455  

Expected Intraday Resistance: 22,600 – 22,675 - 22,800

Expected Intraday Support: 22365 – 22,275 – 22,050

Nifty Commodities
Last close: 5,563.65

As the index trades at 55,63.65, the near-term trend appears to be downward. However, the recent sharp correction has confined the index to a trading range.

If the index manages to trade above 5,490, there is a possibility of a pullback, as this level would serve as crucial support for the bulls in the near-term. On the other hand, if the index falls below 5,490, it could find support around 5,325, which would provide an opportunity for investors to accumulate this index and its constituents.

Given this, the best trading strategy would be to take a calculated risk by buying at the current market price with a stop loss of 5,490 for traders with higher risk appetite or to wait for the correction to conclude and then accumulate at around 5,325 levels for investors with lower risk appetite.

No Trade Zone: 5,550 – 5,575  

Expected Intraday Resistance: 5,595 – 5,620 - 5,675

Expected Intraday Support: 5,536 – 5,510 - 5,470

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