Technical Analysis

Nifty call: Buy above 15,300 with stop-loss at 15,240

Akhil Nallamuthu | Updated on February 17, 2021 Published on February 17, 2021

BL Research Bureau

Nifty 50 February Futures (15,300)

Influenced by major indices in Asia, the Nifty 50 and the Sensex opened with a gap-down today and show bearish bias despite recouping some of its losses post openings. The Nifty 50 is now trading lower by 0.2 per cent compared to yesterday’s close, whereas the Sensex is down by 0.3 per cent.

In Asia, the Nikkei 225 and the ASX 200 index have lost 0.6 per cent and 0.5 per cent, respectively. Among the majors, the Hang Seng is the only gainer, up by about 1 per cent.

Looking at the market breadth of the Nifty 50, it is almost equally split as the advance-decline ratio now stands at 24-26. But the volatility has dropped, indicating less fear. India VIX – the volatility index – is down by 2.6 per cent to 21.22.

Even as the benchmark indices are struggling today, the mid- and small-cap indices are trading with a positive bias. They have gained between 0.3 and 0.7 per cent so far. Among the sectoral indices, the Nifty PSU bank index is the top gainer, up by 6 per cent followed by the Nifty media index, up by nearly 2 per cent. On the other hand, the Nifty IT and pharma index are the top losers, down by 1 per cent each.

Futures: Like the underlying Nifty 50, the February futures of the index began the session lower i.e., at 15,279 as against yesterday’s close of 15,330. The contract then dropped to mark an intraday low of 15,205 and on the back of the support at 15,200, it bounced off that level. As it stands, the futures are now hovering at the important level of 15,300. Although the rebound looks strong and the inclination can be towards upside until the contract stays above 15,200, bulls should take down the hurdle at 15,300 decisively for the rally to continue.

Given the above factors, traders can stay away now and go long if the contract breaches the resistance at 15,300. Stop-loss can be at 15,240. Above 15,300, the contract can face minor hindrance at 15,325. But this level can be expected to be breached, and futures could touch 15,400. Subsequent resistance is at 15,430. On the downside, the notable supports are at 15240 and 15,200.

Strategy: Buy above 15,300; stop-loss at 15,240

Supports: 15,240 and 15,200

Resistances: 15,325 and 15,400

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Published on February 17, 2021
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