Technical Analysis

Nifty call: Go long in dips with stop-loss at 11,400

Akhil Nallamuthu | Updated on August 24, 2020

BL Research Bureau

Nifty 50 August Futures (11,485)

The Indian benchmark indices, like its Asian peers, are in the green today. Both the Nifty 50 and the Sensex spot indices opened with a gap-up and have been moving higher. Among the major Asian indices, the Nikkei 225 has ended today’s session with a gain of nearly one-third of a per cent. The Hang Seng and the Shanghai composite indices are trading higher by 1.7 per cent and 0.3 per cent, respectively.

The market breadth of the Nifty 50 index clearly shows positive market sentiment as 33 out of the 50 stocks in the index have gained today so far. Like the benchmarks, the mid-cap and the small-cap indices too have gained. Among the sectoral indices, except the Nifty IT (down by 0.1 per cent) and the Nifty Pharma (down by 0.7 per cent), all other indices are in the green. The top performers are the Nifty private bank index and the Nifty financial services index, up by 2.3 per cent and 2.2 per cent, respectively. As the broader market sentiment looks bullish, the volatility has eased by about 2.5 per cent to 19.5 levels.

Following the Nifty 50 spot index, the August futures of the index opened higher today at 11,410 compared to Friday’s close of 11,377. Since open, the contract has been gaining where it registered an intraday high of 11,494 before slightly moderating to the current level of 11,485. The price has comfortably rallied past the important level of 11,400 which had been preventing the contract from rallying for about one month. As long as it lies above 11,400, the bulls will be in charge of the contract. So, traders can go long in declines with stop-loss at 11,400. On the upside, it can rally to 11,530 and 11,580.

Strategy: Go long in dips with stop-loss at 11,400

Supports: 11,455 and 11,400

Resistances: 11,530 and 11,580

Published on August 24, 2020

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