Technical Analysis

Nifty Call: Buy on declines with fixed stop-loss at 10,540 levels

Yoganand D | Updated on July 03, 2020 Published on July 03, 2020

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Nifty 50 July Futures (10,569)

Tracking the positive Asian markets, the domestic equity indices - the Sensex and the Nifty 50 began the session with a minor gap-up open and continued to move sideways with an upward bias. The Nikkei 225 has advanced 0.7 per cent to 22,306, and Hang Seng index has gained 1.2 per cent to 25,436 levels in today's session. US stock indices had closed marginally on a positive note in the last session. Both the Sensex and the Nifty have advanced 0.45 per cent each. The market breadth of the Nifty index is biased towards advances. The India VIX or the volatility index has fallen 1.2 per cent to 26.1 levels. Nifty mid, as well as small-cap indices, have rallies 0.8 per cent and 0.3 per cent respectively. Sectoral indices are trading mixed. Nifty PSU Bank index is the top loser, down by 0.9 per cent. On the other hand, the Nifty realty and IT have advanced 0.77 per cent and 0.73 per cent correspondingly.

The index futures of July month started the session with a gap-up open at 10,597. After an initial decline to the intra-day low at 10,542 the contract resumed the uptrend. It recorded an intra-day high at 10,605 and tests key resistance at 10,600 levels. Traders can make use of intra-day dips to buy the contract while maintaining a fixed stop-loss at 10,540 levels. The contract can re-test resistance at 10,600. An emphatic break above this barrier can push the contract northwards to 10,630 and 10,650 levels. Key supports below 10,540 are at 10,520 and 10,500. A plunge below 10,500 can bring back selling interest and witness a corrective decline to 10,480 or 10,450 levels.

Strategy: Buy in declines with a fixed stop-loss at 10,540 levels

Supports: 10,540 and 10,520

Resistances: 10,600 and 10,630

BL Research Bureau

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Published on July 03, 2020
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