Technical Analysis

Nifty call: Buy on declines with fixed stop-loss at 8,500 levels

Yoganand D | Updated on March 31, 2020 Published on March 31, 2020

Nifty 50 April futures (8,590)

The Sensex and the Nifty commenced the session with a gap-up open amid mixed Asian markets. The Nikkei 225 index has fallen 0.8 per cent to 18,917 levels, while the Hang Seng index has gained 0.9 per cent to 23,398 levels in today's session. Both the Sensex and the Nifty continued to trend upwards and have gained more than 3 per cent each. The market breadth of the Nifty index is biased towards advances. The India VIX has tumbled almost 7 per cent to 66.9 levels. Both the Nifty mid and small-cap indices have advanced 1.7 per cent and 2 per cent, respectively. All the sectoral indices are trading in positive territory. The top gainers are Nifty Metal and FMCG, which have surged 4.2 per cent and 4.1 per cent respectively.

The Nifty April month contract started the session with a gap-up open at 8,499. After an initial decline to the intra-day low of 8,357, the contract resumed the up-move and breached a key resistance at 8,500 levels. It has recorded an intra-day high at 8,617 levels. The near-term view stays positive as long as the contract trades above 8,500 levels.

Traders can buy on declines, with a stop-loss at 8,500 levels. The contract can test resistances at 8,600 and 8,620 levels. A strong rally above these levels can take it higher to 8,650 and then to 8,700 levels. But a fall below 8,500 can bring back selling interest and drag the contract down to 8,450 and then to 8,400 levels.

Strategy: Buy on declines with fixed stop-loss at 8,500 levels

Supports: 8,500 and 8,450

Resistances: 8,620 and 8,650

Published on March 31, 2020

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