Technical Analysis

Nifty Call: Buy in dips with stop-loss at 8,500 levels

Yoganand D | Updated on April 07, 2020 Published on April 07, 2020

Nifty 50 April Futures (8,633)

The Sensex and the Nifty commenced the session with a large gap-up open, taking positive cues from the US as well as Asian markets. The Dow Jones and S&P 500 index had jumped 7.7 per cent and 7 per cent respectively in the previous session. The Nikkei 225 has surged 2 per cent to 18,950, and Hang Seng index climbed 1.4 per cent to 24,085 levels in today's session. Both the Sensex and the Nifty have risen about 6 per cent each. The market breadth of the Nifty is broadly towards advances. On the other hand, the volatility index, India VIX has tumbled 7.8 per cent to 50.9 levels. The Nifty midcap index has gained 4 per cent while the Nifty smallcap index has advanced 2.9 per cent. All the sectoral indices are trading in the positive territory. The top gainers are Nifty Pharma and Nifty PVT Bank, which have zoomed 9.7 per cent and 7.7 per cent correspondingly.

The Nifty April month contract began the session with a gap-up open at 8,450. After recording an intra-day low at 8,372 the contract resumed the up-move, breaching a key resistance at 8,500. The contract has marked an intra-day high at 8,675 levels. The near-term stance remains bullish as long as the contract trades above 8,500 levels. Traders can make use of intra-day dips to buy the contract while maintaining a stop-loss at 8,500 levels. A decisive rally above 8,650 can take the contract higher to 8,700 and then to 8,750. Subsequent resistances are at 8,800 and 8,850 levels. On the downside, a decisive fall below 8,500 can bring back selling pressure and drag the contract down to 8,450 and then to 8,400. Next support is at 8,300.

Strategy: Buy in dips while maintaining a stop-loss at 8,500 levels

Supports: 8,500 and 8,450

Resistances: 8,650 and 8,700

 

Published on April 07, 2020

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