Technical Analysis

Nifty call: Buy the Sept contract with stop-loss at 17,165

Akhil Nallamuthu BL Research Bureau | Updated on September 02, 2021

The domestic benchmark indices continue to race ahead

The Nifty 50 and the Sensex, are at 17,180 and 57,665, respectively, are up by nearly 0.6 per cent each for the day so far. The major uptrend is helping the indices to stay in the green. But the Asian market looks mixed – the Nikkei 225 has gained 0.3 per cent whereas the Hang Seng is flat. Nevertheless, the domestic benchmark indices continue to race ahead.

The advance-decline ratio i.e., the market breadth of the Nifty 50 is indicating bullishness as the ratio stands at 36-14. Besides, all the mid- and small-cap indices have gained between 0.6 and 1.1 per cent. Moreover, barring the Nifty Auto (down by 0.2 per cent) and the PSU bank index (down by 0.1 per cent) all other sectoral indices are up so far, thereby hinting at broad-based buying. The volatility has also seen a marginal drop as indicated by India VIX, which is down by nearly 1 per cent to 14.05.

Also read: Nifty 50 September Futures (17,125): Tread with caution

Futures

The September futures contract of the Nifty 50 opened higher at 17,139 versus yesterday’s close of 17,097. It then rallied to mark an intraday high of 17,211 and is now hovering at the key level of 17,200. The overall trend is up, and the buying seems to be broad-based today, meaning the likelihood of further rally from here for the rest of the day is high.

Hence, traders can go long in the contract with stop-loss at 17,165. It can touch 17,250 and possibly rally to 17,300 today. But if it overturns the trend and declines, the futures can find support in the band of 17,170 and 17,150. Subsequent support is at 17,100. Nevertheless, the intraday trend will remain bullish until the contract stays above 17,170.

Strategy: Buy the contract with stop-loss at 17,165

Supports: 17,170 and 17,150

Resistances: 17,250 and 17,300

Published on September 02, 2021

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