Technical Analysis

Nifty call: Go long with stop-loss at 17,450 if contract breaches 17,500

Akhil Nallamuthu | Updated on November 25, 2021

Liquidate longs when contract touches 17,600

Nifty 50 November Futures (17,480)

The Asian markets look positive and so, even as the Indian benchmarks began the session flat, it has now gone up. The Nifty 50 and Sensex have gained about 0.4 per cent each and are currently at 17,485 and 58,600.

However, despite the gain, market breadth of the Nifty 50 is showing a bearish bias as the advance-decline ratio stands at 21-29. Like the benchmarks, the mid- and small-cap indices are up for the day and have gained between 0.1 and 0.7 per cent. Among the sectoral indices, the Nifty Realty and the Nifty Pharma are the top gainers, up by 1.3 and 1.1 per cent, respectively. On the other hand, the Nifty FMCG index is the top loser, down by 0.5 per cent followed by the Nifty Metal, down by 0.4 per cent.

Futures: Although the Nifty opened flat, the November futures of the index opened with a gap-down at 17,320 versus yesterday’s close of 17,408. However, the contract recovered immediately after opening and is currently trading around 17,480. While the trend over the past month has been bearish, today being expiry day, there are chances for the contract to witness price swings on both sides during the course of the session. Nevertheless, a breakout of 17,500 can take the contract to 17,600.

Given the above factors, traders can stay on the side-lines for now and initiate fresh long positions if the contract breaches 17,500. Place stop-loss at 17,450. Liquidate longs when contract touches 17,600 as a move above this level today is less likely.

Strategy: Go long with stop-loss at 17,450 if the contract breaches 17,500. Exit at 17,600.

Supports: 17,450 and 17,400

Resistances: 17,500 and 17,600

Published on November 25, 2021

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