Technical Analysis

Nifty call: Go short on decline below 12,000 levels, with fixed stop-loss

Yoganand D | Updated on February 10, 2020 Published on February 10, 2020

Nifty 50 February futures (12,014)

Tracking weak cues from the Asian markets, the Sensex and the Nifty started the session on a flat note and subsequently declined after witnessing selling interest. The Nikkei 225 has fallen 0.6 per cent to 23,685 levels. The Hang Seng index has also dropped 0.6 per cent to 27,237 levels in today's session.

Both the Sensex and the Nifty declined after a brief recovery from their intra-day lows. The market breadth of the Nifty index is biased towards declines. The volatility index - India VIX - has jumped 3.9 per cent to 14.28 levels. Both the Nifty mid and small-cap indices have slumped 1 per cent and 0.5 per cent respectively. All the sectoral indices are hovering in the negative zone. The Nifty Metal index is the top loser, and has tumbled 2.9 per cent, followed by the auto index, which is down by 2 per cent.

The Nifty February month contract started the session with a gap-down open at 12,081. After marking an intra-day high at 12,088, the contract continued to trend downwards and has recorded an intra-day low at 11,985 levels. The contract now hovers above a key support level of 12,000. A strong fall below this level can drag the contract down to 11,975 and then to 11,950 levels.

The next key supports are at 11,930 and 11,900 levels. Key resistances are at 12,050 and 12,080 levels. A strong rally above the 12,080 level is needed to take the contract higher to 12,100 and then to 12,125 levels. Traders can go short on a fall below 12,000, with a fixed stop-loss.

Strategy: Go short on a conclusive decline below 12,000 levels, with a fixed stop-loss

Supports: 12,000 and 11,980

Resistances: 12,050 and 12,075


Published on February 10, 2020
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