Technical Analysis

Nifty Call: Buy with stop-loss at 8,935

Yoganand D BL Research Bureau | Updated on May 19, 2020

Nifty 50 May Futures (8,977)

Tracking the bullish global markets, Sensex and Nifty began the session with a gap-up open and continued to trade in the positive territory. The US stock indices- Dow Jones and S&P 500 jumped 3.8 per cent and 3.1 per cent respectively, in the last session. The Nikkei 225 index had jumped 1.5 per cent to 20,433 and Hang Seng index has gained 2 per cent to 24,442 levels in today's session. Sensex and Nifty have advanced 1.9 per cent and 2 per cent, respectively so far. The market breadth of the Nifty index is biased towards advances. On the other hand, the India VIX has slumped 3.7 per cent to 39.3 levels. The Nifty mid-cap index has surged 1.7 per cent and Small-cap index has advanced 1 per cent.

Nifty May month contract commenced the session with a gap-up open at 8,971. After an initial decline, the contract recorded an intra-day low at 8,860 and resumed its up-move. The contract has decisively breached a key resistance at 8,900 and marked an intra-day high at 9,034 levels. It currently tests key resistance at 9,000. Trader can buy the contract in declines with a stop-loss at 8,935. A decisive break above 9,000 can take the contract higher to 9,035 and then to 9,050 levels. Subsequent resistances are at 9,075 and 9,100 levels. Immediate support is at 8,950 levels. Conversely, if the contract slumps below the crucial support level of 8,900 can pull the contract down to 8,860 and then to 8,830 levels. In that case desist taking fresh long positions.

Strategy: Make use of intra-day dips to buy with a fixed stop-loss at 8,935 levels.

Supports: 8950 and 8,900

Resistances: 9,000 and 9,035

Published on May 19, 2020

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