Technical Analysis

Nifty call: Buy on declines with stop-loss at 11,345 levels

Yoganand D | Updated on September 10, 2020

Nifty 50 September futures (11,409)

Taking positive cues from the bullish US markets, the Sensex and the Nifty 50 commenced the session with a gap-up open. The Asian markets were mixed today; the Nikkei 225 index has advanced 0.8 per cent to 23,235, while the Hang Seng index is flat at 24,465 levels.

The domestic benchmark indices – the Sensex and the Nifty 50 have advanced 1.3 per cent and 1.1 per cent respectively. The market breadth of the Nifty 50 is biased towards advances. On the other hand, the India VIX has tumbled 4 per cent to 21.3 levels.

In line with the bellwether indices, the Nifty mid and small-cap indices have gained 0.86 per cent and 1.6 per cent respectively. Buying interest is seen in the Nifty PSU bank and media sectoral indices, which have gained over 2 per cent each. Selling pressure is witnessed in the Nifty metal index, which has plunged 1.5 per cent.

The September month Nifty 50 futures contract started the session with a gap-up open at 11,341. It marked an intra-day low at 11,331 and continued to trend northwards, breaching a key resistance at 11,350. After recording an intra-day high at 11,434 the contract started to move sideways with a positive bias. Traders can make use of intra-day dips to buy the contract with a stop-loss at 11,345 levels. A decisive rally above the immediate resistance level of 11,425 can take the contract higher to 11,450 and then to 11,470 levels. Key supports below 11,350 levels are at 11,325 and 11,300 levels.

Strategy: Buy on declines with a stop-loss at 11,345 levels

Supports: 11,350 and 11,325

Resistances: 11,425 and 11,450

Published on September 10, 2020

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