Technical Analysis

Nifty Call: Short below 11,930 with stop-loss at 11,980

Akhil Nallamuthu BL Research Bureau | Updated on December 10, 2019 Published on December 10, 2019

Nifty 50 December Futures (11,935)

The Indian benchmarks are trading slightly lower after opening the session without much change. The Nifty spot index and the Sensex spot index, both are down by 0.3 per cent. Major Asian indices are trading flat whereas the US indices closed marginally lower yesterday.

The December futures of the Nifty 50 index opened the session at 11,972 versus its previous close of 11,966. It has been declining after making an intraday high of 11,976. Currently trading at 11,935, it is testing one of the key support at 11,930.

The market breadth of the Nifty 50 index is showing a bearish bias as the advance-decline ratio is at 15-35. Barring the Nifty financial services index and the Nifty pharma index (both are flat till now), all other sectoral indices have posted loss since today morning. The decline is led by the Nifty IT and the Nifty media index, each down by 1.3 per cent. Thus, both advance-decline ratio and the sectoral indices are hinting a broad based bearishness.

The volatility, as indicated by the volatility index – India VIX, has dropped by one percentage point to 14.45 levels. Lower volatility is a positive factor for the index, but the drop today is not very significant.

Though there are considerable signs of a downtrend, the futures contract is trading near a support level. Unless it breaks below 11,930 decisively, further decline from current level is less likely. Thus traders are recommended to initiate short positions only if the contract breaks below 11,930 and place stop-loss at 11,980.

Strategy: Short below 11,930 with stop-loss at 11,980

Supports: 11,930 and 11,885

Resistances: 11,975 and 12,000

Published on December 10, 2019
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