Technical Analysis

Nifty Call: Buy in dips with a fixed stop-loss at 10,875

Yoganand D, BL Research Bureau | Updated on November 30, 2018

Nifty 50 December Futures (10,903)

Nifty and Sensex began the session on a positive note, tracking Asian markets which posted modest gains. Nikkei 225 was up 0.4 per cent at 22,351 and Hang Seng index rose 0.5 per cent to 26,588 in today's session.

However, experiencing selling pressure at higher levels, Nifty and Sensex started to decline from the day's high. The market breadth of the Nifty index is biased towards declines.

Nifty Bank and Metal sectoral indices are witnessing selling pressure and are trading in negative territory. However, Nifty IT, Realty and Auto sectoral indices are experiencing buying interest.

Nifty December futures contract also started the session on a positive note, with a gap-up open at 10,927. After marking an intra-day high at 10,949, the contract began to decline witnessing selling interest as well as profit-taking at higher levels. The contract has marked an intra-day low of 10,891 and hovers at this level.

Traders with a near-term view should tread with caution. The contract has significant support in the band between 10,875 and 10,880. As long as the contract trades above this base zone, the near-term outlook will remain positive.

Traders can buy in dips with a fixed stop-loss at 10,875. An upward reversal from the current levels can take the contract higher to 10,920 and then to 10,945. A strong break above 10,945 can take the contract higher to 10,970 and 11,000 in the short-term. But, a decisive fall below 10,875 can bring back selling pressure and drag the contract down to 10,850 and then to 10,820 levels. In that scenario, traders should desist taking fresh long positions.

Strategy:  Traders can buy in dips with a fixed stop-loss at 10,875

Supports: 10,875 and 10,850

Resistances: 10,920 and 10,945

Published on November 30, 2018

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