Technical Analysis

Nifty call: Buy in dips with a tight stop-loss

Akhil Nallamuthu | Updated on November 19, 2019

BL Research Bureau

Nifty 50 November Futures (11,965)

The November futures contract, after opening flat has been trending on the upside since morning. The contract seems to have bounced from the key level of 11,900. The Asian indices are giving mixed signals as Nikkei is down by half a percentage point whereas Hang Seng is up by 1.25 per cent.

Though the index is rallying, the market breadth does not indicate a broader trend as the advance-decline ratio is at 25-25, meaning exactly 25 out of 50 stocks in the Nifty 50 index are gaining whereas the remaining 25 are down today. India VIX, the volatility index has dropped by nearly 2 per cent to 15.45 levels. Among the sectoral indices, the Nifty PSU bank index is the top performer, up by one per cent whereas the Nifty media index the top loser, down by 0.8 per cent.

The support at 11,900 seems to be arresting the decline and today’s price action indicate a bullish bias. However, it should be noted that the rally is not broad-based as indicated by the market breadth, and the contract remains within the broader range between 11,835 and 12,070. Hence, one can be bullish but with caution. So, traders with intraday perspective can initiate a long position in dips with a tight stop-loss.

Strategy: Buy in dips with a tight stop-loss

Supports: 11,935 and 11,900

Resistances: 12,000 and 12,070

Published on November 19, 2019

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