Technical Analysis

Nifty Call: Buy in declines with stop-loss at 9,740

BL Research Bureau | Updated on June 01, 2020 Published on June 01, 2020

Nifty 50 June Futures (9,874)

Taking positive cues from Asian markets, the Sensex and Nifty commenced the session with a gap-up open. The Nikkei 225 gained 0.8 per cent to 22,062 and Hang Seng index jumped 3.4 per cent to 23,743 in today's session. Following gap-up open, the Sensex and Nifty continued to trend upwards and advanced 3.5 per cent and 3.4 per cent respectively, so far. The market breadth of the Nifty is biased towards advances. But, the India VIX- volatility index climbed 3.5 per cent to 31.2 levels. Both the Nifty mid and small-cap indices gained 3.6 per cent and 3.5 per cent respectively. All the sectoral indices are hovering in the positive territory. Top gainers are Nifty PSU Bank and Nifty Financial Service which surged 5.8 per cent and 4.5 per cent correspondingly.

The Nifty June month contract started the session with a gap-up open at 9,660. After marking an intra-day low at 9,640 the contract resumed the up-move. It breached key resistances at 9,700 and 9,800 levels. Recording an intra-day high at 9,911, the contract began to correct and is trading in discount to the Nifty spot. However, the near-term outlook will remain positive as long as the contract trades above 9,750 levels.

Traders can make use of intra-day declines to buy the contract while maintaining a stop-loss at 9,740. A decisive break above 9,900 can take the contract northwards to 9,950 and 9,975 levels. Next resistance is at 10,000. On the downside, an emphatic fall below the key support level of 9,750 can bring back selling pressure and profit book can drag the contract down to 9,700 and then to 9,660 levels. Subsequent supports are at 9,640 and 9,600. Immediate supports to note are at 9,800 and 9,750.

Strategy: Buy in declines while retaining a stop-loss at 9,740 levels

Supports: 9,800 and 9,750

Resistances: 9,900 and 9,950

Published on June 01, 2020
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