Technical Analysis

Nifty call: Buy on declines with stop-loss at 13,820 levels

Yoganand D | Updated on December 28, 2020

Nifty 50 December futures (13,874)

The Sensex and Nifty 50 commenced the session with a gap-up open and continued to trend upwards, amid mixed Asian markets. The Nikkei 225 is up by 0.7 per cent at 26,854, while the Hang Seng index is marginally down by 0.12 per cent at 26,353 levels in today's session. Both the Sensex and the Nifty have advanced 0.75 per cent each so far. The market breadth of the Nifty 50 is biased towards advances. The India VIX has jumped 2.5 per cent to 20.4 levels, implying an increase in volatility. Both the Nifty mid and small-cap indices have gained 1.2 per cent and 1.7 per cent respectively.

The Nifty 50 December month contract started the session with a gap-up open at 13,845. After an initial decline to the intra-day low of 13,802, the contract continued to trend upwards and has climbed 0.8 per cent so far today. The near-term resistance is at 13,900. A strong rally above this level can take the contract higher to 13,925 and then to 13,950 levels. Supports below 13,845 are at 13,820 and 13,800. A strong fall below the key base of 13,800 can drag the contract down to 13,765 and then to 13,730 levels. Traders can buy on dips with a stop-loss at 13,820 levels.

Strategy: Make use of declines to buy with stop-loss at 13,820 levels

Supports: 13,845 and 13,820

Resistances: 13,900 and 13,925

Published on December 28, 2020

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