Nifty call: Sell contract on rallies with fixed stop-loss at 10,210 levels

Yoganand D BL Research Bureau | Updated on January 09, 2018

Nifty 50 November Futures (10,186) Taking cues from the negative Asian markets, both the Nifty and Sensex started the session in the red.

The Nikkei 225 has tumbled 1.6 per cent to 22,028 and the Hang Seng index has slipped 0.9 per cent to 28,900 levels. The European and the US markets also ended in negative territory on Tuesday.

The Nifty futures contract started the session with a gap-down at 10,199 levels. After marking an intra-day high of 10,207, the contract resumed its downtrend. It continued to trade in negative territory.

The contract recorded an intra-day low of 10,167 from where it has recovered slightly. However, selling pressure at higher levels and the near-term downtrend can pull the contract further down, following a minor corrective rally. The advance/ decline ratio of the Nifty index is biased towards declines.

Traders with a short-term horizon can make use of intra-day rallies to initiate fresh short positions, while maintaining a fixed stop-loss at 10,210 levels. Continuing the downtrend, the contract can re-test support at 10,170. A further fall below this level can pull the contract down to 10,150 and 10,130 levels in the near-term. Key resistances to note are placed at 10,200 and 10,230.

Strategy: Sell the contract on rallies while maintaining a fixed stop-loss at 10,210 levels.

Supports: 10,170 and 10,150

Resistances: 10,200 and 10,230

Published on November 15, 2017

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