Technical Analysis

Nifty call: Buy above 11,400, with stop-loss at 11,350

Akhil Nallamuthu | Updated on March 02, 2020

Nifty 50 February Futures (11,370)

Markets across Asia are in the green. The Indian benchmarks, too, are up today. The Nifty spot and the Sensex spot have gained 1.6 per cent and 1.7 per cent, respectively. Major Asian indices such as the Nikkei and the Hang Seng are up by 0.9 per cent and 0.7 per cent, respectively.

The advances-declines ratio of the Nifty 50 index at 45-5 indicates a bullish bias. The mid-cap and small-cap indices, too, have gained more one per cent in today’s session. Likewise, all the sectoral indices have gone up; the Nifty IT index is the top gainer, up by a little over 3 per cent, followed by the Nifty metal index, up by 2 per cent. Volatility has dropped by more than 7 per cent today as shown by India VIX – the volatility index. It has come down to 21.6 levels.

The March futures contract of the Nifty index opened higher at 11,283 versus its previous close of 11,149. After registering an intra-day high of 11,388, it is currently trading at 11,370. At 11,400, the contract has a notable resistance, where the 23.6 per cent Fibonacci retracement level of the prior downtrend coincides. So, the rally can sustain only if the contract can surpass that level. Hence, traders are recommended to initiate long positions with stop-loss at 11,350, if the contract rallies past 11,400 decisively.

Strategy: Buy above 11,400, with stop-loss at 11,350

Supports: 11,350 and 11,280

Resistances: 11,400 and 11,450

Published on March 02, 2020

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