Technical Analysis

Nifty call: Buy on declines with fixed stop-loss at 14,280 levels

Yoganand D | Updated on January 08, 2021

Nifty 50 January futures (14,330)

Tracking positive global cues, the domestic benchmark indices - the Sensex and Nifty 50 - commenced the session with a gap-up open and continue to trend upwards. In the last session, the US markets closed on a strong note; the Dow Jones gained 0.7 per cent to 31,041 and the S&P 500 advanced 1.5 per cent to 3,803.

The Nikkei 225 has jumped 2.3 per cent to 28,139 and the Hang Seng index has gained 1.3 per cent to 27,905 in today's session. Both the Sensex and the Nifty 50 have climbed 1 per cent each so far. The market breadth of the Nifty is biased towards advances. The India VIX has slipped 1.2 per cent to 20.3 levels.

Witnessing buying interest, the Nifty midcap and smallcap indices have climbed 1.2 per cent and 1.1 per cent respectively. All the sectoral indices are trading in positive territory and the top gainers are Nifty media and auto, which have jumped 4.3 per cent and 2.8 per cent, respectively.

The January month Nifty 50 futures contract started the session with a gap-up open at 14,281. After an initial decline to the intra-day low of 14,249, the contract resumed its uptrend and breached key resistance at 14,300. The near-term outlook stays positive as long as the contract trades above 14,280 levels. Traders can buy the contract with a fixed stop-loss at 14,280 levels. Key resistances are at 14,350 and 14,375. A decisive fall below the vital base level of 14,280 can bring back buying interest and drag the contract down to 14,250 and then to 14,200 levels. In that case, avoid taking fresh long positions.

Strategy: Buy on declines with fixed stop-loss 14,280 levels

Supports: 14,280 and 14,250

Resistances: 14,350 and 14,375

Published on January 08, 2021

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