Technical Analysis

Nifty call: Buy on dips with stop-loss at 11,625

Akhil Nallamuthu | Updated on October 23, 2019

BL Research Bureau

Nifty 50 October Futures (11,666)

After correcting in yesterday’s session, the Nifty has started today's session on a positive note. The index has gained 0.4 per cent and the Sensex is trading higher by 0.5 per cent. Asian peers are showing mixed signs where the Nikkei is up by 0.3 per cent and Hang Seng is down by one percentage point. The US benchmarks closed marginally negative.

The bullish price action of the Nifty 50 index is corroborated by market breadth of the index as 34 out of 50 stocks are in the green. The volatility index – India VIX – is down by 2 per cent and is at 16.4 levels. Among the sectoral indices, the Nifty PSU bank index is the top performer, gaining 1.8 per cent today and the Nifty media index is the top loser, losing 1.2 per cent.

The October futures of the Nifty 50 opened flat at 11,610 versus it previous close of 11,624. After declining initially to 11,575, it started to trend up. The buying momentum seems to be intact. Hence as long as the future trades above 11,630, the bullish trend will remain intact. Hence, on intra-day basis, traders can initiate long position on dips with stop-loss at 11,625. Adhere to stop-loss strictly because a fall below 11,630 can reverse the trend.

Strategy: Buy on dips with stop-loss at 11,625

Supports: 11,630 and 11,575

Resistances: 11,700 and 11,745

Published on October 23, 2019

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