Technical Analysis

Nifty call: Go long if contract breaks out of 11,555

Akhil Nallamuthu BL Research Bureau | Updated on September 16, 2020 Published on September 16, 2020

Nifty 50 September Futures (11,535)

The equity benchmark indices in India today are ruling flat-- Nifty 50 and Sensex are now trading near yesterday’s closing levels. The equity markets across Asian looks mixed, failing to give a definite direction. While the early riser S&P ASX 200 ended the session with a gain of about a per cent, the Nikkei 225 wrapped up the session on a flat note. But the Hang Seng index is down by 0.3 per cent so far.

Though the Nifty 50 index is flat, the market breadth hints at a bearish bias as the advance-decline ratio stands at 22-28. The mid-cap index is flat whereas the small-cap index is trading with a bearish bias as it is down by quarter per cent. Sectoral indices look mixed where the top gainer is the Nifty auto index, up by 1.6 per cent and the Nifty media index is the top loser, down by 1.5 per cent. There is not much change in volatility today as there has been not clear intraday trend till now. India VIX is now at 20.53.

The September futures contract of the Nifty 50 index opened the session marginally lower at 11,518 compared to Tuesday’s close of 11,527. But after marking a low of 11,511, the contract rallied and marked its day high at 11,555. It has moderated from that level and is now trading at around 11,535. Looking at the intraday price action, it has largely been moving sideways 11,520 and 11,550.

Given that, even though the overall trend is bullish, traders can wait for now and initiate fresh long positions with stop-loss at 11,500 if price breaks out of 11,555. While 11,580 can be a hurdle, a breach of 11,555 can build good positive momentum and the contract is highly likely to cross over 11,580. Subsequent resistance can be spotted at 11,630 and 11,675. On the downside, the supports from the current level are at 11,500 and 11,475.

Strategy: Go long if the contract breaks out of 11,555

Supports: 11,500 and 11,475

Resistances: 11,580 and 11,630

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Published on September 16, 2020
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