Technical Analysis

Nifty Call: Go long on rally above 11,200 with a fixed stop-loss

Yoganand D | Updated on September 22, 2020 Published on September 22, 2020

Nifty 50 September Futures (11,183)

Taking bearish cues from the negative global markets, the Sensex and the Nifty 50 started the session on a flat note and slipped into the negative territory. The Dow Jones had tumbled 1.8 per cent to 27,147, and S&P 500 had declined 1.2 per cent to 3,281 levels in the last session. The Hang Seng index has slipped 0.9 per cent to 23,736, and CSI 330 index also declined by 1.2 per cent to 4,635 in today's session. However, the Sensex and the Nifty 50 are on a recovery mode after an initial decline.

The benchmark indices have trimmed their intra-day loss to about 0.35 per cent. The market breadth of the Nifty 50 index is biased towards decline. The India VIX has declined 1.6 per cent to 21.8 levels. Though the recovery is seen in the key benchmark indices, the Nifty mid and small-cap indices have tumbled 1 per cent each. Buying interest is seen in the Nifty IT and Pharma sectoral indices that have gained about 1 per cent each. Top losers are the Nifty realty and media which have fallen 1.9 per cent each.

The Nifty 50 September month contract started the session on a positive note at 11,282. After marking an intra-day high at 11,291 the contract began to decline on the back of selling interest. But, the contract recorded an intra-day low at 11,103 and took support at this level. Subsequently, the contract started to recover. That said, it faces key resistance at 11,200. A strong break above this level is needed to initiate new long positions with a fixed stop-loss. In that case, it can trend upwards to 11,225 and then to 11,250 levels. Key resistances above 11,250 are at 11,270 and 11,290 levels. On the downside, a decisive fall below the immediate support level of 11,150 can pull the contract down to 11,120 and 11,100 levels.

Strategy: Go long only on a strong rally above 11,200 with a fixed stop-loss

Supports: 11,150 and 11,125

Resistances: 11,200 and 11,225

BL Research Bureau

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Published on September 22, 2020
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