Technical Analysis

Nifty Call: Buy on declines with stop-loss at 12,240 levels

Yoganand D | Updated on December 19, 2019 Published on December 19, 2019

BL Research Bureau

Nifty 50 December Futures (12,267)

Tracking the weak global markets, the Sensex and the Nifty commenced the session in negative territory. The Nikkei 225 has fallen 0.3 to 23,864, and Hang Seng index has declined 0.4 per cent to 27,776 levels in today's session. However, the crucial domestic benchmark indices have begun to trend upwards after hovering in red in the first hour. The Sensex and the Nifty have advanced about 0.23 per cent each. The market breadth of the Nifty is biased towards advances. On the other hand, India VIX has slumped 1.8 per cent to 12.11 levels. Though the large-cap indices like Nifty 50 and Nifty Next 50 have gained 0.23 per cent and 0.4 per cent respectively but the small-cap index is hovering in the negative territory. Buying interest is seen in the Nifty Auto index, which has advanced almost 1 per cent while the selling pressure is observed in the Nifty Pharma which has fallen 0.4 per cent.

After a gap-down open at 12,228, the Nifty December month contract registered an intra-day low at 12,207. Subsequently, the contract began to trend upwards and has breached a key resistance at 12,250 levels. It has marked an intra-day high at 12,270. Traders can make use of intra-day dips to buy the contract while maintaining a stop-loss at 12,240 levels. A strong rally above 12,270 can test resistance at 12,300 levels. A further rally beyond 12,300 can take the contract northwards to 12,325 and 12,350 levels. Conversely, if the contract decisively tumbles below the critical support level of 12,230, it can decline to test the next support at 12,200.

Strategy: Make use of intra-day declines to buy the contract while maintaining a stop-loss at 12,240 levels

Supports: 12,230 and 12,200

Resistances: 12,270 and 12,300

Published on December 19, 2019
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