Technical Analysis

Nifty Call: Buy on declines with stop-loss at 11,725

Yoganand D BL Research Bureau | Updated on October 16, 2020 Published on October 16, 2020

Nifty 50 October Futures (11,766) The Sensex and Nifty 50 commenced the session with a gap-up open amid mixed Asian markets. The Nikkei 225 has declined 0.4 per cent to 23,410, while the Hang Seng index gained 1.1 per cent to 24,432 in today's session. Following initial choppiness, the domestic benchmark indices have advanced, the Sensex has climbed 0.7 per cent and the Nifty 50 has gained 0.6 per cent. The market breadth of the Nifty 50 is biased towards advances. The India VIX has marginally dropped by 0.8 per cent to 21.8 levels. Both the Nifty mid and small-cap indices have advanced 0.6 and 0.7 per cent respectively. The Nifty media and IT are the only sectoral losers that have fallen 0.4 and 0.7 per cent respectively. The top gainers are Nifty Bank and PVT Bank which have gained 2 per cent each.

October month Nifty 50 futures contract started the session with a gap-up at 11,721. After marking an intra-day low at 11,673 the contract continued to trend upwards. The outlook for the session will remain positive as long as the contract trades above 11,700 levels. Traders can make use of intra-day dips to buy the contract with a stop-loss at 11,725. A decisive rally above the immediate resistance level of 11,780 can take the contract higher to 11,800. A strong break above 11,800 can take the contract higher to 11,830 and then to 11,850. A fall below the immediate support level of 11,730 can pull the contract down to 11,700 and then to 11,670 levels. In that case avoid taking fresh long positions.

Strategy: Buy on declines with a fixed stop-loss at 11,725 levels

Supports: 11,730 and 11,700

Resistances: 11,780 and 11,800

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Published on October 16, 2020
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