Nifty Call: Sell on rallies with stop loss at 11,000

Akhil Nallamuthu BL Research Bureau | Updated on August 29, 2019

Nifty 50 August Futures (10,965)

The Nifty continues to trade weak by losing 0.8 per cent and breaking below the psychological level of 11,000 in the current session. The index attempted to recover after a gap down opening.

However, the rally could not sustain, and it started to plunge. If it continues to trade below 11,000 the possibility of further sell off is more. The Sensex, which has also fallen by 0.8 per cent today, seems to be weak in line with the Nifty.

Asian peers, too, seem to have lost some ground, trading marginally lower between 0.15 and 0.30 per cent, however outperforming the Indian benchmark. Market breadth of the Nifty 50 index indicates a bearish bias with advance-decline ratio at 31-19.

Also, the volatility index India-VIX is up by 0.7 per cent at 16.95 levels. Along with the mid-cap and small-cap index, all sectoral indices are in the red, with the pharma index alone gaining 0.4 per cent for the day on the back of a weaker rupee.

The Nifty August month contract opened the session with a gap down at 11,010 after an indicative opening at a much lower level of 10,805. After making an intra-day high of 11,019, the contract slumped to intraday price action low of 10,925, breaking an important support level of 10,950. A fall below the support of 10,915 will accelerate the decline towards support levels of 10,860. Traders can sell on rallies with stop loss at 11,000.

Strategy: Sell on rallies with stop loss at 11,000

Supports: 10,915 and 10,860

Resistances: 10,985 and 11,040

Published on August 29, 2019

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