Technical Analysis

Nifty 50 October Futures (11,245): Sell on rallies with stop-loss above 11,320

Akhil NallamuthuBL Research Bureau | Updated on October 10, 2019


The Nifty, after a stellar rally yesterday, is losing steam in today’s session. The Nifty is down by 0.8 per cent and the Sensex is down by 0.9 per cent. This despite positive cues from Asian peers and even the US market that rallied and closed on a positive note. Considering these factors, yesterday’s rally appears just a pullback move of the broader bearish trend.

At 12-38, the Advance – Decline ratio of the Nifty 50 index is clearly bearish. The volatility index – India VIX – at 17.4 is up by 1.5 per cent for the day. Sectoral indices are in the red, with the Nifty PSU bank index and Nifty private bank index losing over 3 per cent each in today’s session. This indicates a broader selling led by banking sector which were major gainers yesterday.

Currently trading below 11,260, the October expiry futures contract of the Nifty 50 opened the day on a weak note at 11,276 against the previous close of 11,347. It marked an intraday low is at 11,215 and the contract has slid below the 21-day moving average. The negative sentiment appears to have creeped in and hence traders can sell the contract on rallies with stop loss just above the resistance at 11,320.

Strategy: Sell on rallies with stop-loss above 11,320

Supports: 11,200 and 11,100

Resistances: 11,320 and 11,350

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Published on October 10, 2019
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