Here's why Ravi Nathani is bearish on Nifty Auto index in the near-term

According to technical analyst, since the MACD has turned negative, and Parabolic Stop and Reversal has turned bearish, it is advised for traders to adopt sell-on-rise strategy for Nifty Auto index

Nifty FMCG
Last close: 45,976.95 (Bullish)

The Nifty FMCG index has been under observation in the recent times, due to its volatile trend in the market. According to charts, the index suggests strong support at 45,265 and therefore, traders are advised to closely monitor its movement.

The technical charts signal a positive breakout in the near-term and short-term if the index breaches resistance level of 46,331. This breakout could, thereby, lead to a sharp rally in the index and its constituents, with the next resistance being estimated at around 47,025.

Moreover, technical indicators such as Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) have shown positive signs on daily charts, adding to the potential of a positive trend.

Based on these observations, traders are advised to take a long position in the index above 46,331 with a target of 47,025.

Nifty Metal
Last close: 5,762.85 (Range Bound)

Since the index currently trades at 5,762.85, it is expected to remain within a defined range, in light of the sharp correction. The identified range is between 6,000 and 5,580, with a close above or below either level triggering an incline or decline, respectively.

From a trading perspective, it would be advisable to adopt a strategy of purchasing near the support and selling near the resistance, while adhering to a stop loss at 1 percent from the purchase or sell level, until a clear breakout or breakdown on the charts become apparent.

Nifty Auto
Last close: 13,106.55 (Bearish)

With a current market price of 13,106.55, the index is expected to trade within a certain range, with strong support at 13,000 level. This level will serve as a crucial pivot point for all bullish positions, as a close above this level would signal a bearish breakout, with the target expected to reach 12,700.

In light of the technical indicators, such as the MACD which has given a negative indication, and the Parabolic Stop and Reversal which has turned bearish, it is advised to adopt a sell-on-rise strategy for this index with a strict stop-loss based on the closing basis at 13,300. This approach would be suitable for both near and short-term traders.

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