Technical Analysis

Nifty 50 December Futures (13,070)

Akhil Nallamuthu | Updated on November 27, 2020 Published on November 27, 2020

BL Research Bureau

Even as the Asian markets are trading in the green, the Indian benchmarks are trading flat despite opening with a gap-up. Among the major indices, the Nikkei 225 has gained 0.4 per cent today and the Hang Seng index is up by 0.6 per cent so far. Whereas the Nifty 50 and the Sensex are up by 0.2 per cent.

Though the Nifty 50 is flat, the market breadth of the index is signalling a bullish inclination as the advance-decline ratio stands at 32-18. Another conducive factor for the bulls is that the volatility has dropped in today’s session. India VIX – the volatility index – is down by 2.3 per cent to 19.55.

Interestingly, the mid-cap and small-cap indices have so far outperformed the benchmarks. They have gained between 1.8 per cent and 2.6 per cent until now. Moreover, all the sectoral indices are trading in the green as well, indicating broader buying today. The Nifty Realty is the best performer, up by nearly 3 per cent followed by the Nifty media index, up by 2.6 per cent.

As the Nifty 50 index opened with a gap-up, the December futures contract opened marginally higher at 13,043 versus its previous close of 13,022. The contract then marked an intraday high of 13,079 and is currently trading around 13,070. The contract has thus moved past the hindrance at 13,050 and it is most likely to rally towards 13,100. A breakout of this level can result in the contract touching 13,160 – its prior high. On the downside, below 13,050, the contract has a considerable support at 13,000.

Given the above factors, traders can be bullish today and initiate fresh long positions on declines with stop-loss at 13,000

Strategy: Buy in dips with stop-loss at 13,000

Supports: 13,050 and 13,000

Resistances: 13,100 and 13,160

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Published on November 27, 2020
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