Last close: 22,427.65 (Buy on dips)
It is important to note that as Relative Strength Index (RSI) is slowly moving higher, this signals that each dip in the index should be considered an opportunity to accumulate for traders and swing players.
Therefore, the best trading strategy for short-term and swing traders would be to buy the index on dips, with the expectation of outperformance in the near future. This strategy is supported by the technical indicators, which indicate a bullish trend in the index.
With the RSI moving higher and the index trading within a range, traders should keep a watchful eye on the range levels and accumulate on each dip.
Last close: 5,612.70 (Buy on dips)
It was suggested that if the index managed to trade above 5,490, there was a possibility of a pullback, and if it fell below 5,490, it could find support around 5,325, which would provide an opportunity for investors to accumulate this index and its constituents.
The best trading strategy at the time was to take a calculated risk by buying at the current market price with a stop loss of 5,490 for riskier traders or to wait for a correction to conclude and then accumulate around 5,325 levels for safer investors and traders.
Technical indicators such as MACD have turned positive, and RSI is trending upwards. Therefore, the best trading strategy for traders would be to buy on dips as the expected target is mentioned above.
The current market price (CMP) is 5,612.70, so traders can consider buying the index on any dips towards 5,490-5,325 levels for a potential upside of 5,700-5,750.
(Ravi Nathani is an independent technical analyst. Views expressed are personal)
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