Technical Analysis

Nifty call: Buy on dips with a tight stop-loss

Akhil Nallamuthu | Updated on November 08, 2019 Published on November 08, 2019

Nifty 50 November Futures (12,010)

The Nifty, after closing above the critical level of 12,000 yesterday, opened lower today and declined during the initial hours. The Asian indices are giving out mixed signals, with the Nikkei closing marginally higher, and the Hang Seng down by one per cent today. The US benchmarks closed slightly higher on hopes of a trade deal.

The market breadth of the Nifty 50 index suggests a bearish bias as 34 of the 50 stocks have declined. But the overall trend is bullish, and the index can rise. We can witness increased volatility as shown by India VIX, the volatility index. It is up by 3 per cent at 15.6 levels. The Nifty realty index, up by 2.5 per cent, is the top gainer among the sectoral indices. The Nifty FMCG index, along with the Nifty pharma index, each down by a little over one per cent, are the top losers.

The November futures of the Nifty 50 index opened lower at 12,002 versus its previous close of 12,047. It then declined to make an intra-day low of 11,963. After taking support at 11,966, the contract has moved up and is recouping its losses. So long as the contract stays above 11,900, the major trend will be bullish. Hence, traders can initiate long positions on dips, with tight stop-loss.

 

Strategy: Buy on dips with a tight stop-loss

Supports: 11,966 and 11,930

Resistances: 12,050 and 12,100

Published on November 08, 2019
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.