Technical Analysis

Nifty Call: Go long above 14,700 with stop-loss at 14,650

Akhil Nallamuthu | Updated on May 05, 2021

BL Research Bureau

Nifty 50 May Futures (14,685)

Despite the Asian markets sending out mixes signal, the Indian equity indices opened with a significant gap-up today. Both the Nifty 50 and the Sensex rallied after open and are now trading with a gain of 0.8 and 0.9 per cent, respectively. Among the major Asian indices, the ASX 200 posted a gain of 0.4 per cent whereas the Hang Seng dropped by 0.5 per cent.

The advance-decline ratio of the Nifty 50 i.e., the market breadth is signalling a positive bias as the ratio stands at 41-9 and the volatility has declined as indicated by India VIX – the volatility index – which is down by a little over 3 per cent to 22.31. Like the benchmarks, the mid- and the small-cap indices are positive as well, up between 0.3 and 0.8 per cent. Among the sectoral indices, all the indices barring the Nifty FMCG and realty index (trading flat) all other indices are in the green showing a broad based buying. The Nifty Pharma and the Nifty PSU bank index are the top gainers, up by 3.7 and 1.9 per cent, respectively.

Futures: Like the underlying Nifty 50 index, the May futures contract began the session higher at 14,625 versus yesterday close of 14,549. But post the open, the contract was largely trading in a sideways trend i.e., it was fluctuating between 14,560 and 14,650. However, in the last hour, it has broken out of the range and is now trading around 14,700.

Since 14,700 is a hurdle, traders can go long if this level is breached decisively. Stop-loss can be at 14,650. Above 14,700, the contract can rally to 14,750 and then possibly to 14,800.

Strategy: Go long above 14,700 with stop-loss at 14,650

Supports: 14,650 and 14,600

Resistances: 14,700 and 14,750

Published on May 05, 2021

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