Technical Analysis

Nifty call: Buy on break of 17,885 with stop-loss at 17,830

Akhil Nallamuthu | Updated on: Jan 05, 2022
image caption

Nifty Bank, the top gainer, up 1.4 per cent; Nifty IT down nearly 2 per cent

Nifty 50 January futures (17,840)

Despite the Asian market showing bearish signs, the Indian benchmark indices began the session marginally higher. However, they could not extend the rally and have been flat during the day so far. The Nifty is at 17,815 and the Sensex at 59,895. Among the Asian majors, the ASX 200 and the Hang Seng are down by 0.3 and 1.2 per cent, respectively. The Nikkei 225 is flat.

Although the Nifty is flat, the market breadth of the index is at 32-16. The mid- and small-cap indices are trading mixed – the Midcap 50 is up by 0.2 per cent, and the Smallcap 50 is down by 0.1 per cent. Among the sectoral indices, Nifty Bank,the top gainer, is up by nearly 1.4 per cent. Nifty IT is the top loser, down by 1.9 per cent.

Futures: The January futures of the Nifty opened the session almost flat at 17,840 versus yesterday’s close of 17,846. It is currently hovering around 17,840 and the contract has its nearest supports at 17,830 and 17,800. While the contract stays above these levels, the bulls will have an upper hand.

Nevertheless, the negative sentiment from the Asian markets might keep the upside limited or it could even drag the Nifty futures lower. Considering this, the recent trend has been bullish. Traders can now stay away and initiate fresh longs on signs of bulls regaining control. That is, one can take intraday longs if the contract rallies above 17,885 with stop-loss at 17,830. Liquidate the positions at 18,000 as there can be a considerable correction from those price levels.

However, if the price breaks below 17,800, the contract could fall to 17,700.

Strategy: Buy on a break of 17,885 with stop-loss at 17,830. Exit at 18,000.

Supports: 17,830 and 17,800

Resistances: 17,885 and 18,000

Published on January 05, 2022

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