Technical Analysis

Nifty call: Buy on declines with stop-loss at 9,875

Akhil Nallamuthu | Updated on June 18, 2020

BL Research Bureau

Nifty 50 June Futures (9,945)

The Indian benchmark indices opened a little lower today on the back of bearish cues from the Asian market. However, the indices have recovered, and the Nifty 50 spot and the Sensex spot indices are now trading higher by 0.8 per cent and 0.5 per cent, respectively. Among the major Asian indices, the Nikkei index has ended the day with a loss of 0.4 per cent, and the Hang Seng index is trading lower by half a per cent.

The market breadth of the Nifty 50 index is biased towards advances as the advance-decline ratio is at 37-13. Following the benchmark indices, the mid-cap and small-cap indices are in the green. Barring the Nifty auto index (down by 0.2 per cent), all other sectoral indices have gained so far. The Nifty metal index is the top gainer, up by 2.5 per cent followed by the Nifty media index, up by 1.5 per cent. As the market is inclined towards uptrend today, the volatility has dropped considerably. India VIX – the volatility index is down by nearly 5 per cent to 31.7 levels.

The June futures contract of the Nifty 50 index, which opened marginally lower at 9,845 versus its previous close of 9,854, has been on an uptrend since morning. Also, the contract has breached the resistance at 9,900 and is currently trading around 9,945. Until it remains above 9,900, the likelihood of a rally is high. Hence, for intraday, traders can go long on declines with stop-loss at 9,875.

Strategy: Buy on declines with stop-loss at 9,875

Supports: 9,900 and 9,850

Resistances: 10,000 and 10,075

Published on June 18, 2020

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