Technical Analysis

Nifty 50 March Futures (14,620)

Akhil Nallamuthu BL Research Bureau | Updated on March 24, 2021

Nifty metal index tanks 2.2% and is the top loser

The domestic benchmark indices opened today’s session on a weak foot following negative cues from Asian peers.

Right from the beginning of the session, the Nifty 50 and the Sensex have been declining sharply and are now down by 1.3 per cent each. Among the Asian major indices, the Nikkei 225 lost 2 per cent and the Hang Seng is down by 2 per cent.

The market breadth of the Nifty 50 index is showing clear bear dominance as the advance-decline ratio now stands at 7-43. Following the decline, the volatility has gone up i.e., India VIX – the volatility index – has shot up by nearly 6 per cent to 21.9.

Like the benchmark indices, the mid-cap and the small-cap indices are down as well, losing between 0.6 and 1 per cent. Among the sectoral indices, except the Nifty pharma index (up by 0.9 per cent), all other indices are in the red. The Nifty metal index is the top loser, down by 2.2 per cent followed by the Nifty bank index, down by 1.6 per cent.

Futures

The March futures contract began the session lower at 14,733 as against yesterday’s close of 14,832 as the underlying Nifty spot index opened with a gap-down. Since opening of the session, it has been falling sharply and after making an intra-day low of 14,572, the contract is now trading around 14,620. The trend looks bearish and as the market breadth and the sectoral indices indicate, the sell-off looks broad-based and the decline is more likely to continue for the rest of the session.

But since 14,600 can offer some support, traders can initiate fresh short position if the contract falls below this level again. That is, short below 14,600 with stop-loss at 14,660. Supports below 14,600 can be spotted at 14,525 and 14,500; whereas the nearest resistance levels are at 14,660 and 14,700.

Strategy: Sell below 14,600 with a stop-loss at 14,660

Supports: 14,600 and 14,525

Resistances: 14,660 and 14,700

Published on March 24, 2021

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