Technical Analysis

Nifty call: Go long above 14,750 with stop-loss at 14,670

Akhil Nallamuthu | Updated on May 04, 2021

BL Research Bureau

Nifty 50 May Futures (14,730)

Taking positive cues from the Asian markets, the Indian benchmark equity indices opened higher than yesterday’s close. Both the Nifty 50 and the Sensex went up post opening and are now trading with a gain of about 0.3 per cent each. Among the major indices in Asia, the ASX 200 has gained nearly 0.6 per cent and the Hang Seng is up by 0.8 per cent so far.

The market breadth of the Nifty 50 index is showing a positive bias as the advance-decline ratio stands at 36-14 and the volatility has gone down, which is synonymous with an uptrend. India VIX – the volatility index – has dropped by nearly 6 per cent to 22.36.

Following the benchmark indices, the mid- and small-cap indices have gained between 1 and 1.9 per cent. Among the sectoral indices, the Nifty PSU bank index is the top gainer, up by 5.4 per cent, followed by the Nifty media index, up by 2.1 per cent. At the other end, the Nifty pharma is the top loser, down by 0.6 per cent and the Nifty IT is down by 0.1 per cent.

Futures: Like the underlying Nifty 50 index, the May futures contract began the session higher at 14,708 versus yesterday close of 14,685. But it saw a decline in the first hour of trade wherein it marked a low of 14,625. However, the contract started to recover swiftly and rallied past the open and is now trading around 14,730, up by 0.3 per cent. The contract is consolidating around this level as 14,750 is a resistance.

Hence, even though the trend is bullish, traders can wait and initiate fresh longs if 14,750 is clearly breached. Stop-loss can be maintained at 14,670. Above 14,750, the contract might touch 14,800 and it could even rally to 14,865.

Strategy: Go long above 14,750 with stop-loss at 14,670

Supports: 14,670 and 14,640

Resistances: 14,750 and 14,800

Published on May 04, 2021

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