Technical Analysis

Nifty call: Go short on rallies, with a stop-loss at 11,330

| Updated on October 04, 2019 Published on October 04, 2019

People walk past a new brand identity for Nifty Indices inside the National Stock Exchange building in Mumbai.   -  REUTERS

Nifty 50 October futures (11,284)

The Sensex and the Nifty began the session on a positive note, taking bullish cues from the US markets, although the Asian markets are mixed. The Dow Jones index gained 0.47 per cent to 26,201 and the S&P 500 added 0.8 per cent to its 2,910 levels in the last session. The Nikkei 225 index is up by 0.3 per cent at 21,410 levels, while the Hang Seng index has slumped 1.4 per cent to 25,737 in today's session.

However, the domestic benchmark indices declined, giving up their intra-day gains on the back of selling pressure at higher levels. The Sensex and the Nifty are trading in the red. The market breadth of the Nifty index is biased towards declines. The Nifty mid and small-cap indices are down by 0.2 per cent 0.3 per cent. The India VIX has slumped 2.3 per cent to 17.39 levels. Selling interest is witnessed in the Nifty FMCG and media sectoral indices that have declined 1.4 per cent and 1.6 per cent respectively.

The October month Nifty futures contract started the session with a gap-up open at 11,419. After marking an intra-day high at 11,430, the contract began to decline due to selling pressure at higher levels. It has registered an intra-day low at 11,266, to recover slightly.

The near-term outlook remains bearish as long as the contract trades below 11,360 levels. Traders can make use of intra-day rallies to go short, with a stop-loss at 11,330 levels.

A fall below 11,280 can drag the contract down to 11,260 and then to 11,230. The next support is at 11,200. On the upside, a strong rally above 11,360 can push the contract higher to 11,400. Subsequent key resistances are placed at 11,420 and 11,440 levels.

Strategy: Go short on rallies, with a stop-loss at 11,330

Supports: 11,260 and 11,230

Resistances: 11,300 and 11,360

Published on October 04, 2019
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