Technical Analysis

Nifty 50 May Futures (9,303)

Yoganand D, BL Research Bureau | Updated on May 08, 2020

Tracking the positive global markets, the Sensex and the Nifty started the session with a gap-up open and continues to trade in the positive territory. The Japanese index, Nikkei 225 has surged 2.5 per cent to 20,179 levels and Hang Seng index has gained 0.86 per cent to 24,186 in today's session. The Sensex and the nifty have advanced 1.4 per cent and 1.3 per cent respectively. Market breadth of the Nifty is biased towards advances. The India VIX has slumped 5.2 per cent to 37.8 levels. The Nifty mid and small-cap indices have gained marginally by 0.6 per cent and 0.3 per cent correspondingly. Barring Nifty auto and Nifty PVT Bank indices which has slumped 1 per cent and 0.6 per cent other sectoral indices are trading in the positive territory. Nifty media is the top gainer that has advanced 2.3 per cent followed by Nifty pharma that has rallied 1.7 per cent.

The Nifty May month futures contract began the session with a gap-up open at 9,348. But after recording an intra-day high at 9,369 the contract started to witness selling interest at higher levels and declined. It has marked an intra-day low at 9,275. The contract is trading at a discount to the Nifty spot, indicating bearishness. Traders should tread with caution and consider initiating fresh short positions on a fall below 9,275 levels with a fixed stop-loss. Such a fall can drag the contract to 9,250 and then to 9,230. Next key support is at 9,200. On the upside, a strong rally above the vital resistance level of 9,335 can take the contract higher to 9,350 and then to 9,375 levels. Subsequent resistances are at 9,400 and 9,425.

Strategy: Go short only on a fall below 9,275 levels with a fixed stop-loss

Supports: 9,275 and 9,250

Resistances: 9,335 and 9,350

Published on May 08, 2020

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