Technical Analysis

Nifty Call: Buy on dips with stop loss at 11,190 levels

Yoganand D | Updated on August 17, 2020

Nifty 50 August Futures (11,215)

The Sensex and Nifty 50 started the session on a positive note amid mixed cues from the Asian markets. The Nikkei 225 index has slipped 0.8 per cent to 23,096 levels while Hang Seng index has gained 0.9 per cent to 25,420 levels in today's session.

Following an initial decline, Sensex and Nifty 50 began to trend upwards gradually and climbed 0.2 per cent and 0.3 per cent, respectively. The market breadth of Nifty 50 index is biased towards advances. India VIX - volatility index gained about 1 per cent to 21.8 levels. The Nifty mid and small cap indices outperformed the bellwether indices, gaining 0.6 per cent and 0.7 per cent correspondingly. Buying interest was seen in Nifty auto and media sectoral indices that advanced over 2 per cent each. On the other hand, selling pressure is witnessed in Nifty PSU Bank index that has slipped 0.8 per cent.

The Nifty 50 August month contract commenced the session with a gap-up open at 11,272 and began to decline witnessing selling interest at higher levels. The contract declined below the key support level of 11,200 and found base at the intra-day low of 11,155 levels. However, it has recovered and moved above the 11,200 levels. Near-term stance remains positive as long as the contract trades above 11,200 levels. Traders can buy the contract with a stop-loss at 11,190 levels. Key supports below 11,200 are at 11,180 and 11,150. A strong rally above the immediate resistance level of 11,272 can take the contract northwards to 11,300. A further rally above this level can take the contract higher to 11,330 and 11,350 levels.

Strategy: Buy on dips with a fixed stop-loss at 11,190 levels

Supports: 11,200 and 11,180

Resistances: 11,272 and 11,300

Published on August 17, 2020

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