Nifty Call: Go short on a fall below 11,050

Yoganand D | BL Research Bureau | Updated on August 13, 2019 Published on August 13, 2019

Nifty 50 August Futures (11,055)

Taking cues from the weak global markets, the Sensex and the Nifty began the session on a flat note and immediately slipped in to negative territory. After an initial corrective up-move the key benchmark indices continued to trend downwards.

The Dow Jones index had slumped about 1.48 per cent last session. The Asian markets have also slumped in today's session, the Nikkei 225 fell over 1 per cent to 20,455 and Hang Seng index has tumbled 1.9 per cent to 25,317 levels.

The domestic key indices are resilient and have declined about 0.5 per cent; the index heavy weight Reliance Industries that has surged over 10 per cent is cushioning the indices. The market breadth of the Nifty index is biased towards declines.

On the other hand, the India VIX has gained 4.4 per cent to 16.5 levels. The selling pressure is seen in the Nifty mid-cap index which has declined 1.2 per cent. The Nifty Auto sectoral index is the top loser which has slumped 2.4 per cent.

The Nifty August month contract started the session almost on flat note, opening at 11,129. It declined initially and marked an intra-day low at 11,046 levels and bounced up. But, the contract failed to sustain the up-move. After marking an intra-day high at 11,145, the contract started to decline once again. The contract has a key support at 11,050. A strong fall below this level will be cue for initiating fresh short positions with a fixed stop-loss.

Key supports below 11,050 are at 11,025 and 11,000. Subsequent supports below 11,000 are at 10,975 and 10,950. On the upside, the contract needs to move beyond 11,100 for a corrective rally to 11,130 and 11,150 levels.

Strategy: The contract trades above a key support at 11,050. Go short on a fall below this level with a fixed stop-loss.

Supports: 11,050 and 11,025

Resistances: 11,100 and 11,130

Published on August 13, 2019
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