Technical Analysis

Nifty call: Buy on dips with fixed stop-loss at 14,200 levels

Yoganand D | Updated on January 07, 2021

Nifty 50 January futures (14,248)

The domestic equity indices - Sensex and Nifty 50 - commenced the session on a positive note amid mixed Asian markets. The Nikkei 225 is up by 1.6 per cent at 27,490, while the Hang Seng index is down by 0.5 per cent at 27,543 levels. After a positive start, the Sensex and Nifty 50 have pared some of their intra-day gains; but the indices are moving higher again – gaining 0.35 per cent and 0.43 per cent respectively.

The market breadth of the Nifty 50 is biased towards advances. Backing the up-move, the India VIX has slumped 3.8 per cent to 20.18 levels. Both the Nifty mid and small-cap indices have climbed 1.3 per cent and 1.5 per cent respectively. The top sectoral gainers are the Nifty metal and realty indices that have advanced 3.3 per cent and 1.6 per cent correspondingly. Selling interest is seen in the Nifty IT, FMCG and Pharma which have fallen about 0.4 each.

The Nifty 50 January month contract started the session on a positive note, opening at 14,200 levels. This is an intra-day low. The contract moved higher and marked an intraday high at 14,283. The near-term view for the contract is bullish. Traders can buy the contract on dips with a fixed stop-loss at 14,200 levels. The contract can test resistance at 14,280 and a strong rally above this level can take it higher to 14,300 and then to 14,330 levels. The next key barrier is 14,350 level. Supports below 14,200 are at 14,180 and 14,150 levels.

Strategy: Buy on dips with a fixed stop-loss at 14,200 levels

Supports: 14,200 and 14,180

Resistances: 14,280 and 14,300

Published on January 07, 2021

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