Technical Analysis

Nifty call: Go long with stop-loss at 14,830

Akhil Nallamuthu | Updated on May 17, 2021

Nifty PSU Bank among the gainers, Nifty Pharma is the top loser

Nifty 50 May futures (14,875)

Even as the Asian markets send mixed signals, the Indian equity benchmarks opened with a gap-up. Both the Nifty 50 and the Sensex have been gaining since the open and are now up by 1.1 and 1.2 per cent, respectively. Among the Asian indices, the Nikkei 225 posted a loss of 0.9 per cent, whereas the Hang Seng is up by 0.7 per cent.

The market breadth of the Nifty 50 index is showing a bullish inclination as the advances-declines ratio stands at 32-18. The mid- and small-cap stocks are in the green like the benchmarks; they have gained between 1 and 1.3 per cent. India VIX – the volatility index – has dropped by 4 per cent to 19.45, indicating that volatility has dropped since morning. Among the sectoral indices, the Nifty PSU Bank is up by 3.3 per cent and consequently, the Nifty Bank is up by about 3 per cent so far, thus making these two indices the top performers today so far. On the other hand, Nifty Pharma is the top loser, down by nearly 0.4 per cent, followed by the Nifty Metal index that has lost 0.2 per cent.

Futures: Following the underlying Nifty 50 index, the futures contract (May expiry) opened with a gap-up at 14,762 against Friday’s close of 14,714. After opening, the contract rallied and marked an intra-day high of 14,883 and is now trading around that level. The price action hints at good strength in the uptrend and the contract is likely to head further northwards.

Hence, traders can consider going long for intra-day, with stop-loss at 14,830. From the current levels, the contract is likely to go beyond the resistance at 14,900 and touch 14,950. Subsequently, it could rally towards 15,000. Notable supports can be seen at 14,830 and 14,800.

Strategy: Go long with stop-loss at 14,830

Supports: 14,830 and 14,800

Resistances: 14,950 and 15,000

Published on May 17, 2021

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