Technical Analysis

Nifty 50 October Futures (11,265): Tread with caution as the index stuck within a range

Akhil NallamuthuBL Research Bureau | Updated on October 11, 2019


The Indian indices are witnessing high volatility in today’s session. The indices initially rallied following the global equity rally as a result of optimism surrounding the trade talk between the US and China. Nikkei is up by over a percentage point whereas Hang Seng is trading higher by 2.2 per cent. However, the rally in domestic market did not sustain where both Nifty and Sensex dropped from the day’s open.

Market breadth of the Nifty 50 index shows some bullish sign as 29 stocks in the green and the remaining 21 stocks are on a decline. India VIX, the Indian volatility index is up by over 3 per cent and is at 17.8 levels. The Nifty metal index has registered a substantial gain today as it is up by 1.5 per cent whereas the biggest loser among sectoral indices is the Nifty pharma index, down by 0.7 per cent.

Looking at the Nifty futures, the October contract opened the session at a marginally higher level of 11,289 and rallied to mark an intraday high at 11,385. However, it immediately witnessed sell-off and fell sharply below the key level at 11,200. Scrutinising the price action, there exists a considerable resistance band between 11328 and 11,362, which is coincided by 38.2 per cent Fibonacci retracement level of the previous bearish trend. On the downside, 11,200 acts as a solid support. So, the futures must decisively break either 11,200 or 11,362 on closing basis to confirm the next leg of trend. Hence, traders are advocated to approach with caution and wait for a breakout.

Strategy: Tread with caution as the index seem to be stuck within a range

Supports: 11,200 and 11,120

Resistances: 11,328 and 11,362

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Published on October 11, 2019
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