Technical Analysis

Nifty 50 April Futures (8,660)

Yoganand D, BL Research Bureau | Updated on March 27, 2020

Taking cues from the positive global markets, the domestic equity indices- the Sensex and the Nifty started the session with a gap-up open. The key US benchmark indices, Dow Jones and S&P 500 had gained over 6 per cent each last session. The Nikkei 225 index has surged 3.8 per cent to 19,389 and Hang Seng index has advanced 0.8 per cent to 23,533 levels in today's session. After initial rally, both the Sensex and the Nifty have begun to decline witnessing selling interest and profit booking at higher levels. The key benchmark indices are currently wavering between positive and negative territory. The market breadth of the Nifty index is biased towards declines. The India VIX has fallen about 0.7 per cent to 71 levels. Though the Nifty mid cap index has declined 0.6 per cent but the Nifty small-cap index has advanced 1 per cent. The Nifty Bank index has gained 2.5 per cent witnessing buying interest in the private sector banks. On the other hand, Nifty Auto index has slumped 2 per cent on the back of selling pressure.

The Nifty April month contract commenced the session with a large gap-up open at 8,938. After recording an intra-day high at 9,044 the contract began to decline experiencing selling pressure at higher levels. The contract breached key supports at 8,800 and 8,700 to mark a low at 8,563 levels. But, it recovered and resumed its downtrend to make a new intra-day low of 8,525. A strong rally above the immediate resistance level of 8,700 can strengthen the corrective up-move and take the contract higher to 8,750 and then to 8,800 levels. But the contract will be bearish until it remains below 8,700. Traders can consider buying above 8,700 levels with a fixed stop-loss. Conversely, if the contract falls below 8,650 it can test the support at 8,500. Next key support is at 8,400.

Strategy: A strong rally above 8,700 will be cue for taking long positions with a fixed stop-loss

Supports: 8,500 and 8,400

Resistances: 8,700 and 8,750

Published on March 27, 2020

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