Technical Analysis

Nifty call: Buy on dips with fixed stop-loss at 11,325 levels

Yoganand D | Updated on May 17, 2019 Published on May 17, 2019

Nifty 50 May futures (11,356)

The Sensex and the Nifty started the session on a flat note, extending the up-move. The Dow Jones had gained 0.84 per cent to 25,862 and S&P 500 had surged 0.9 per cent to 2,876 levels in the last session. Asian markets showed mixed signs, the Nikkei 225 has gained 0.9 per cent to 21,250, while the Hang Seng index has slipped 1.2 per cent to 27,932 levels in today's session.

The Sensex and the Nifty continue to trend upwards in positive territory. The market breadth of the Nifty index is biased towards advances. The India VIX has gained 2.85 per cent to 29.18 levels. The Nifty mid- and small cap indices have advanced 0.4 per cent each.

The Nifty May month contract began the session on a flat note, opening at 11,284.9 levels. After an initial decline, the contract recorded an intra-day low at 11,267. Subsequently, the contract resumed the up-move and has breached a key resistance at 11,300 levels. It has marked an intra-day low at 11,369 levels. The near-term outlook is positive for the contract. Traders can make use of intra-day dips to buy the contract, while maintaining a fixed stop-loss at 11,325.

A strong rally above 11,370 can take the contract higher to 11,385 and 11,400 levels. A further rally beyond 11,400 can extend the up-move to 11,425 and 11,450 levels. On the other hand, a decisive fall below the key base level of 11,300 can bring back selling pressure and drag the contract down to 11,285 and 11,265 levels.

Strategy: Make use of dips to buy with a fixed stop-loss at 11,325 levels

Supports: 11,300 and 11,285

Resistances: 11,370 and 11,385

Published on May 17, 2019

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