Technical Analysis

Nifty call: Go long above 10,925 level, with fixed stop-loss

| Updated on August 05, 2019 Published on August 05, 2019

Nifty 50 August futures (10,890)

Tracking the bearish Asian markets, the Sensex and Nifty began the session with a gap-down opening and continued to trend down. The Nikkei 225 slumped 1.7 per cent to 20,720 and the Hang Seng index nose-dived 2.9 per cent to 26,129 in today's session. The rupee has also weakened against the dollar.

Although the Sensex and the Nifty are witnessing a minor corrective rally from their intra-day low, a decisive rally above the key resistance level of 36,800 and 10,900 respectively is required to strengthen the momentum.

The market breadth of the Nifty index is biased towards declines. The India VIX has sky-rocketed from 11.5 per cent to 16.9 levels. Apart from the Nifty IT index, which is trading in positive territory, gaining 0.4 per cent, other sectoral indices continue to hover in negative territory, dragged by the Nifty Bank and Nifty PSU Bank indices.

The Nifty August month contract began the session with a gap-down opening at 10,922. The contract continued to decline and recorded an intra-day low at 10,806 levels, before it started to recover. It is witnessing a corrective rally, but key resistances are placed at 10,900 and 10,925. A strong rally above these resistances can take the contract higher to 10,950 and 10,975 levels. The subsequent key resistance is at 11,000.

On the other hand, a decline below the immediate support level of 10,840, can drag the contract down to 10,810 levels again. Traders should tread with caution as long as the contract trades below 10,925. Consider initiating fresh long positions on a strong rally above 10,925, with a fixed stop-loss.

Strategy: The contract faces a key resistance at 10,925. Go long above this level, with a fixed stop-loss

Supports: 10,840 and 10,810

Resistances: 10,900 and 10,925

Published on August 05, 2019
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