Technical Analysis

Nifty call: Buy on dips with stop-loss at 15,250

Akhil Nallamuthu | Updated on February 15, 2021

BL Research Bureau

Nifty 50 February Futures (15,305)

The Indian benchmarks broke out of the consolidation range today and registered fresh lifetime high following positive cues from the Asian equity markets. The Nifty 50 and the Sensex have gained by about 1 per cent each so far. Among the major Asian equity indices, the early rise ASX 200 gained nearly 1 per cent, and the Nikkei 225 posted a gain of 1.9 per cent.

The market breadth of the Nifty 50 index is showing bullish bias as the advance-decline ratio stands at 35-15 and the volatility seems to have dropped a bit i.e., India VIX – the volatility index – has declined by 1.4 per cent to 21.75.

The Nifty mid- and small-cap indices, like the benchmarks, have gained between 0.7 per cent and 2 per cent. Among the sectoral indices, except the Nifty media (down by 0.3 per cent) and the Nifty IT index (down by 0.1 per cent) all others are in the green. The Nifty private bank and the Nifty realty index are the top performers by appreciating by 2.3 per cent each. This implies that the buying is broad based today and the likelihood of the rally sustaining today is high.

Like the underlying Nifty 50 spot index, the February futures contract opened today with a gap-up at 15,249. It then rallied and moved past the prior high of 15,264.4 and marked a fresh intraday high of 15,318. The contract thus broke out of the range of 15,000 and 15,260, opening the door for further strengthening. Considering these factors, traders can be bullish and initiate fresh longs on declines with stop-loss at 15,250.

On the upside, the contract can rally to 15,350 and then touch 15,400. Key supports from the current levels are at 15,260 and 15,180.

Strategy: Buy on dips with stop-loss at 15,250.

Supports: 15,260 and 15,180

Resistances: 15,350 and 15,400

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Published on February 15, 2021
futures and options
technical analysis
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