Technical Analysis

Nifty Call: Go short on a strong fall below 12,050 levels

Yoganand D BL Research Bureau | Updated on December 02, 2019 Published on December 02, 2019

Nifty 50 December Futures (12,083)

 

The Sensex and the Nifty commenced the session on a positive note taking bullish cues from the Asian markets. The Nikkei 225 has jumped 1 per cent to 23,529 and the Hang Seng index has rallied 0.4 per cent to 26,443 levels in today's session. Following a positive start, the domestic equity indices, the Sensex and the Nifty began to decline due to selling pressure and profit taking at higher levels and are hovering slightly in the negative territory. The market breadth of the Nifty is biased towards declines.

The India VIX, the fear index, has jumped 4 per cent to 14.48 levels, indicating higher volatility is on the cards. The Nifty mid and small-cap indices have slumped 0.8 per cent each. Barring the Nifty metal index which has rallied 0.2 per cent, all the other sectoral indices are hovering in the negative territory. The Nifty IT index has slumped 1.1 per cent.

The Nifty December month futures contract started the session with a gap-up open at 12,133. After marking an intra-day high at 12,137, the contract began to decline on the back of selling interest and has breached a key support at 12,100.

The contract recorded an intra-day low at 12,052 and took support. It is moving sideways in the band between 12,050 and 12,100. Traders should tread with caution as long as the contract trades in this band. Go short on a strong fall below 12,050, with a fixed stop-loss. The contract can test the next supports at 12,025 and 12,000 levels. Key resistances are at 12,130 and 12,250 levels.

 

Strategy: Go short on a strong fall below 12,050 levels

Supports: 12,050 and 12,025

Resistances: 12,100 and 12,130

Published on December 02, 2019
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