Technical Analysis

Nifty call: Go long with stop-loss at 16,840

Akhil Nallamuthu BL Research Bureau | Updated on August 30, 2021

Supports at 16,850 and 16,800; Resistances at 16,900 and 17,000

Nifty 50 September Futures (16,890)

Following positive cues from the Asian markets, the Nifty 50 and the Sensex began the day on the front foot and have been making good gains. The Nifty 50 has marked a fresh all-time high of 16,881 and is now at 16,875 and similarly, the Sensex made a fresh lifetime high of 56,734 and is currently around 56,680. Both the indices are set to scale more heights. Among Asian majors, the Nikkei 225 has gained 0.5 per cent and the Hang Seng is up by 0.25 per cent.

Sensex, Nifty close at fresh highs

The market breadth of the Nifty 50 denotes a strong upward bias as the advance-decline ratio stands at 43-7. Notably, all the mid- and small-cap indices are up between 1.4 and 1.9 per cent respectively. Likewise, among the sectoral indices, barring the Nifty IT index (down by 0.15 per cent) all others are in the green, led by the Nifty Metal, up by 2.45 per cent. This is followed by the Nifty Realty index, up by 2.15 per cent so far. These factors shows that the buying since the morning has been broad-based. Besides, there is a drop in volatility, which is a positive signal for the bulls — i.e., India VIX, the volatility index, is down by 2.2 per cent to 13.10.

Futures: The September futures contract of the Nifty 50 opened the session with a gap-up at 16,745 versus Friday’s close of 16,718. It has been rallying steadily since the beginning of the session and is now hovering around 16,890. The price action is very bullish, and the major trend is also up, and this is supported by broader buying happening in the market.

Sensex, Nifty close at fresh highs

The above factors show that the contract is likely to make further gains today and so traders can buy Nifty September futures with stop-loss at 16,840. On the upside, the contract is likely to move above 16,900 and potentially touch the key level of 17,000. Above that level, 17,050 and 17,100 can be the hurdles. From the current level of 16,890, the supports can be spotted at 16,850 and 16,800.

Published on August 30, 2021

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