Technical Analysis

Nifty call: Go short on decisive fall below 12,900

Yoganand D | Updated on November 19, 2020

Nifty 50 November futures (12,905)

The Sensex and Nifty 50 commenced the session with a gap-down in negative territory and immediately recovered. However, the benchmark indices failed to decisively rally higher in positive territory.

Witnessing selling interest, the indices began to decline and have slipped 0.35 per cent. But the market breadth of the Nifty 50 is biased towards advances. The India VIX - Volatility index - has rallied 2.2 per cent to 19.5 levels. The Nifty mid and small-cap indices have climbed 1 per cent and 0.7 per cent respectively.

Among the sectoral indices, selling interest is seen in Nifty Bank, which has fallen 1.5 per cent, followed by Nifty PVT Bank, which is down by 1.45 per cent. On the other hand, buying interest is seen in Nifty FMCG, realty and media that have advanced 1 per cent each.

The Nifty November month contract began the session on a negative note, opening at 12,857 levels. After an initial recovery, the contract marked an intra-day high at 12,976 and started to witness selling pressure at higher levels. The contract now tests support at 12,900. A decisive fall below this base can drag the contract down to 12,875 and then to the 12,850 level. A further decline below these supports can pull the contract down to 12,825 and then to 12,800 levels. Resistances beyond 12,930 are at 12,950 and 12,975 levels.

Strategy: Go short on a decisive fall below 12,900 with a fixed stop-loss

Supports: 12,900 and 12,875

Resistances: 12,930 and 12,950

Published on November 19, 2020

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