Technical Analysis

Nifty call: Buy contract on intra-day dips with stop-loss at 14,740 levels

Yoganand D | Updated on March 23, 2021

Nifty 50 March futures (14,790)

The Sensex and Nifty began the session on a marginally positive note despite weak Asian markets. The Nikkei 225 has declined 0.6 per cent to 28,995 and the Hang Seng index has slumped 1.36 per cent to 28,493 levels in today's session. Amid volatility, the Sensex and the Nifty 50 have advanced 0.35 per cent each so far.

The market breadth of the Nifty 50 is biased towards advances. The India VIX has gained 2.5 per cent to 21.01 levels, indicating an increase in choppiness. Both the Nifty mid and small-cap indices have advanced 0.8 per cent and 0.4 per cent respectively. Buying interest is seen in the Nifty PSU Bank and PVT Bank indices that have climbed 2.3 per cent and 1 per cent respectively. The Nifty metals, media and FMCG indices are hovering in marginally negative territory.

The March month Nifty futures contract started the session on a slightly positive note, opening at 14,752 against the previous close of 14,741. After marking an intra-day high at 14,881,the contract declined and recorded an intra-day low at 14,713. But the contract bounced up from this low and is now trading at around 14,790 levels.

The key resistance ahead is at 14,840 and then at 14,880 levels. Traders can make use of intra-day dips to buy the contract, while maintaining a fixed stop-loss at 14,740 levels. A strong rally above 14,800 can take the contract higher to 14,840 and then to 14,880 levels. Key resistances above these levels are placed at 14,900 and 14,930 levels. On the downside, a decisive fall below the key base level of 14,825 can bring back selling interest and pull the contract down to 14,700 and then to 14,660 levels. In that case, avoid taking fresh long positions.

Strategy: Make use of intra-day dips to buy the contract with a stop-loss at 14,740 levels

Supports: 14,740 and 14,700

Resistances: 14,800 and 14,840

Published on March 23, 2021

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