Technical Analysis

Nifty call: Buy on dips with stop-loss at 12,100

Akhil Nallamuthu, BL Research Bureau | Updated on January 29, 2020 Published on January 29, 2020

Nifty 50 January Futures (12,150)

After closing in the red for two consecutive days, both the Indian benchmarks i.e. the Nifty spot and the Sensex spot index has rallied in today’s session. Both the indices are up by around 0.7 per cent so far. The Nikkei index, one of the major Asian indices is up by 0.6 per cent. While the Hang Seng index has opened in the red it has been gaining intraday.

At 44-6, the market breadth of the Nifty index is exhibiting a clear bullish bias. Like the benchmarks, the mid-cap and the small-cap indices are in the green. Also, all the sectoral indices have gained today, led by the Nifty metal index up by 1.8 per cent. This is followed by the Nifty PSU bank index and the Nifty auto index, each up by nearly one per cent. These are indications of a broad-based buying and further appreciation is highly likely.

The volatility too has dropped – a condition favourable for the bulls. India VIX, the volatility index has come down by nearly 4 per cent to 16.6 levels.

The January futures contract of the Nifty index opened at 12,114 versus yesterday’s close of 12,068. It has been gaining since then. The momentum looks positive with several factors indicating potential upside. One can take bullish view for intraday. Traders are recommended to buy the contract on dips with stop-loss at 12,100.

Strategy: Buy on dips with stop-loss at 12,100

Supports: 12,130 and 12,100

Resistances: 12,200 and 12,230

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Published on January 29, 2020
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