Technical Analysis

Nifty Call: Buy on dips with stop-loss at 11,390

Yoganand D | Updated on August 19, 2020

Nifty 50 August Futures (11,430) The domestic equity benchmark indices - Sensex and Nifty 50 started the session with a gap-up open and continued to trade in the positive territory amidst mixed Asian market. The Nikkei 225 index gained marginally by 0.26 per cent to 23,110 while Hang Seng index slipped 0.8 per cent to 25,150 levels today. The Sensex and Nifty 50 climbed 0.5 per cent each. The market breadth of Nifty 50 is biased towards advances. On the other hand, the India VIX has slumped 3 per cent to 19.7 levels. Both the Nifty mid and small-cap indices have advanced 0.8 per cent and 1.3 per cent respectively. All the sectoral indices are hovering in the positive territory and the top gainers are Nifty PSU and Nifty media that have jumped 2.9 per cent and 2.7 per cent respectively.

The August month index futures commenced the session with a gap-up open at 11,436. After an initial decline, the contract recorded an intra-day low at 11,407 and reversed higher. The near-term outlook stays positive as long as the contract trades above 11,400 levels. A decisive break above the key resistance level of 11,450 can push the contract northwards to 11,475 and then to 11,500 levels. Conversely, if the contract slumps below 11,400 it can witness selling interest which may pull the contract down to 11,370 and then to 11,350 levels. Next supports are at 11,330 and 11,300.

Strategy: Buy on dips with a fixed stop-loss at 11,390 levels

Supports: 11,400 and 11,370

Resistances: 11,450 and 11,500

BL Research Bureau

Published on August 19, 2020

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