Here's what Ravi Nathani suggests on the financial sector

According to the technical analyst, the finance sector is expected to underperform in the near term, but this underperformance will provide a good buying opportunity for traders and swing players.

The finance sector - Private Bank index, PSU Bank index, Financial Services index
(Suggest to wait for correction, then 'buy on dips')
 

The finance sector, including the private bank index, PSU banks, and financial services, has been showing a bearish trend on the charts, characterized by lower tops and lower bottoms. However, the charts for the near and short term suggest that there may be a change in the trend. The reason is multiple technical indicators (MACD + Price action and RSI).

Firstly, the MACD of all three indices suggested that the signal line and MACD line have intersected at lower levels, which implied less selling pressure in the near future. Secondly, according to the price action theory, there is a high chance that all three indices will form a higher bottom, which will provide a good buying opportunity for short-term and swing traders.

Lastly, RSI is expected not to break its previous lows, which is again an early sign of a trend change.

The near and short-term charts also provide the best buying levels for each of the three indices. For private banks, the current market price is 21,088.80, with near-term support at 20,875 and the best buying level at 20,600. For PSU banks, the current market price is 3,820.75, with the best buying level at 3,770.00. And for financial services, the current market price is 18,428.95, with near-term support at 18,236 and the best buying level at 18,036.

In conclusion, the near-term, short term and swing traders are advised to start accumulating these indices below their respective support levels as mentioned above and complete the accumulation at the best buying levels in order to take advantage of the potential upward trend.

Overall, the finance sector is expected to underperform in the near term, but this underperformance will provide a good buying opportunity for traders and swing players.

In simpler terms, this analysis suggests that there is a chance for the finance sector to reverse its bearish trend, and traders should start buying the private bank index, PSU banks, and financial services below their support levels and complete the buying at the best levels in order to benefit from the potential upward trend.

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