Technical Analysis

Nifty Call: Buy with stop-loss at 7,775

Akhil Nallamuthu BL Research Bureau | Updated on March 24, 2020

Nifty 50 March Futures (7,750)

The benchmark indices are trading in the green today, as major indices across Asia have given positive cues. The Nifty spot and the Sensex spot indices have gone up by little over 2 per cent each. Major Asian indices like the Nikkei, the Shanghai composite and the Hang Seng are trading higher by 7 per cent, 2 per cent and 4.6 per cent respectively.

The market breadth of the Nifty 50 index is slightly biased towards upside as 29 out of the 50 stocks in the index are in the green. Among the sectoral indices, the Nifty IT index is the top gainer, up by 4.6 per cent whereas the Nifty realty index is the worst performer, down by 3 per cent. Despite the bullish inclination by the market, the volatility has shot up today by a little over 12 per cent as indicated by India VIX – the volatility index. The index is at 81 levels.

The March futures contract of the Nifty index opened significantly higher today, at 7,879 versus Monday’s close of 7,581. Post the open, the contract rallied and registered an intraday high of 7,976 but declined sharply to the intraday low at 7,526. Since then, it has been recovering and is currently trading at 7,750. Since the band between 7,832 and 7,850 is a resistance band, the contract should decisively breakout of that level to establish a sustainable rally. So, traders can buy the contract with stop-loss at 7,775 if it moves above 7,850.

Strategy: Buy with stop-loss at 7,775 if the contract moves above 7,850

Supports: 7,700 and 7,600

Resistances: 7,850 and 7,975

Published on March 24, 2020

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