Nifty Auto, Metal indices trading in thin range; here’s how to play them
Nifty Auto Index
The short-term chart pattern is Flat on Weekly charts as the previous swing life high & swing low was a correction of 8 per cent between September 12-26, 2022. Next rally was covered in 7 weeks between Sept 26 – Nov 7, 2022, with a gain of 9.54 per cent. The next correction was an exact 125 per cent of first correction, which indicates a flat pattern on charts. The last swing triggered a new low, indicating a lower bottom formation. This means, until the index cross lifetime high level every upside will be treated as a selling opportunity for all traders and Investors.
In the current scenario, we could easily see a lower bottom formation. Resistance for the current rally would be at 13,010 / 13,249 / 13,381. From now on, we have 2 possibilities — either this Index makes a new life high and changes the pattern from bearish to bullish or reaches the resistance level mentioned above and again enters correction.
The near-term pattern, however, is bullish on charts as the index has closed above 6-DSMA and 10-DSMA (Daily Simple Moving Average). Upper Bollinger band is also placed at 13,000; therefore, the best trading strategy for traders would be to sell near resistance levels until we get close above new high.
Below mentioned are the weekly resistance and support levels:
Weekly Resistance Levels: 12925 – 13025 – 13236
Weekly Support Levels: 12716 – 12600 – 12436
Nifty Metal Index
The index has been trading in a range of 6,909 – 6,664. Any trade above or below these levels would add a trigger towards either direction. If it closes above 6,909, its next resistance for this Index would be 7,000 / 7,220. And if it closes below 6,664, we would see support at 6,550 – 6,464 – 6,350. Therefore, keep a strict watch on the above-mentioned range close.
Weekly Resistance Levels: 6949 – 7025 – 7236
Weekly Support Levels: 6810 – 6730 – 6550
Disclaimer: Ravi Nathani is an independent technical analyst. Views expressed are personal
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