Nifty Call: Go long on dips with stop-loss at 12,520

Nifty 50 November Futures (12,618)

The Sensex and the Nifty 50 started the session on a positive note, taking bullish cues from the global markets. The US benchmark indices- Dow Jones and S&P 500 had gained 2.9 per cent and 1.2 per cent respectively in the past session. The Asian markets are slightly up today, the Nikkei 225 is up by 0.26 per cent to 24,905, and the Topix index had jumped 1.1 per cent to 1,700 levels. Hang Seng index has climbed 111 points or 0.43 per cent to 26,127 levels in today's session. The Nifty 50 and Sensex have advanced about 0.9 per cent each. The Nifty 50 index, advance-decline ratio is biased towards advances. But there is an increase in volatility as the India VIX index has gained 5 per cent to 21.1 levels. Though the Nifty 50 index has advanced 0.9 per cent the Nifty Next 50 index has declined 0.8 per cent. The Nifty mid and small-cap indices are trading mixed.

The sectoral indices are also mixed today; the top gainers are Nifty PSU Bank and Nifty Financial Service that have gained 3.3 per cent and 3.2 per cent respectively. On the other hand, the defensive sectors such as Pharma and IT indices have slumped 3.5 per cent and 3.8 per cent correspondingly.

The Nifty 50 November month contract began the session with a gap-up open at 12,582. After marking an intraday low at 12,482 the contract resumed the up-move and decisively breached the key resistance at 12,500. The near-term outlook stays positive as long as the contract trades above 12,500 levels. Traders can buy on declines with a stop-loss at 12,520. A strong rally above 12,600 can take the contract northwards to 12,630 and then to 12,650. Key supports below 12,500 are placed at 12,480 and 12,450.

Strategy: Go long on dips with a stop-loss at 12,520.

Supports: 12,500 and 12,480

Resistances: 12,630 and 12,650

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