Technical Analysis

Nifty call: Go long on strong rally above 12,050 levels with fixed stop-loss

Yoganand D | Updated on January 31, 2020

Nifty 50 February futures (12,025)

Following a positive start, the Sensex and Nifty began to decline due to selling interest at higher levels. The Asian markets are displaying mixed cues; the Nikkei 225 is up 1 per cent at 23,205, while the Hang Seng index has fallen marginally by 0.2 per cent to 26,388 levels.

Both the Sensex and the Nifty are in a recovery, after a minor dip into negative territory. The market breadth is slightly biased towards declines. In contrast, the India VIX has gained 2.2 per cent to 17.17 levels. Selling pressure is seen in the Nifty mid-cap index, which has declined 0.6 per cent, while the Nifty small-cap index is trading flat. The Nifty metal index is the top loser, tumbling 1.2 per cent, followed by the Nifty IT index, which has dropped 0.9 per cent in today's session. On the other hand, the Nifty bank index has advanced 0.6 per cent.

The Nifty February month contract commenced the session with a gap-up open at 12,103. It recorded an intra-day high at 12,124, and began to decline, experiencing selling pressure at higher levels. The contract slipped below the key support level of 12,000 and recorded an intra-day low at 11,985. But it recovered from the intra-day low and moved above 12,000 levels. The immediate resistance at 12,050 needs to be breached so that the contract can trend upwards to 12,075 and 12,100 levels. Traders can go long on a strong rally above 12,050 levels with a fixed stop-loss. Key supports are at 12,000 and 11,985 levels.

Strategy: Go long on a strong rally above 12,050 levels with a fixed stop-loss

Supports: 12,000 and 11,985

Resistances: 12,050 and 12,075


Published on January 31, 2020

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