Technical Analysis

Nifty call: Go long with stop-loss at 11,620

Akhil Nallamuthu | Updated on August 28, 2020

BL Research Bureau

Nifty 50 September Futures (11,675)

Even as the Asian markets are exhibiting mixed signs, the Indian benchmark indices have been moving upwards today. The Nifty 50 spot and the Sensex spot indices are now up by one per cent each. Among the Asian indices, the Nikkei 225 index is down by 1.7 per cent whereas the Hang Seng index is up by 1.8 per cent.

The market breadth of the Nifty 50 index is bullishly biased as the advance-decline ratio is at 34-16. Similar to the benchmarks, the mid-cap and the small-cap indices are in the green and have gained between 0.4 per cent and 1.1 per cent.

Among the sectoral indices, except the Nifty auto index (down by 0.3 per cent) all other indices have gained so far, led by the Nifty PSU bank index, up by 4.4 per cent followed by the Nifty private bank, up by 3.7 per cent. Since the broad market sentiment is bullish, the volatility has dropped as indicated by India VIX – the volatility index – which is down by nearly 1.7 per cent to 18.6 level.

The September futures of the Nifty 50 index began the session with a gap-up at 11,633 versus Thursday’s close of 11,580. After an initial blip, the contract has been rallying strongly. As the overall trend is bullish, and the price has been continuously forming higher highs, the likelihood of further rally is high. Considering this, traders can buy the contract on declines with stop-loss at 11,620. On the upside, it can advance to 11,725 and 11,750.

Strategy: Initiate long positions in dips with stop-loss at 11,620

Supports: 11,640 and 11,620

Resistances: 11,725 and 11,750

Published on August 28, 2020

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