Technical Analysis

Nifty call: Go short on rallies with fixed stop-loss at 10,055 levels

Yoganand D | Updated on June 11, 2020 Published on June 11, 2020

Nifty 50 June futures (10,012)

Taking cues from the weak Asian markets, the Sensex and Nifty began the session with a gap-down open and continued to trend downwards. The Nikkei 225 has slumped 2.8 per cent to 22,472 and the Hang Seng index has declined 1.9 per cent to 24,566 levels. The Sensex and Nifty have fallen about 1.2 per cent each. The market breadth of the Nifty index is biased towards declines.

On the other hand, the India VIX has gained 2.8 per cent to 30.2 levels. While the Nifty large cap indices are witnessing selling interest and have slumped about 1 per cent, the Nifty mid as well small-cap indices are hovering marginally in the green. Except the Nifty media index, which is up by 0.5 per cent, all the other sectoral indices are trading in red. The top losers are Nifty Financial Service and Pharma that have slumped 1.6 per cent and 1.5 per cent respectively.

The Nifty June month contract commenced the session with a gap-down open at 10,061. After an initial rally, the contract recorded an intra-day high at 10,099, before witnessing selling pressure at higher levels. The contract has breached a key support at 10,000 and has registered an intra-day low at 9,963 levels. The near-term stance will remain weak as long as the contract trades below 10,050. Traders can make use of intra-day rallies to go short, while maintaining a stop-loss at 10,055. Key resistances above 10,050 are at 10,070 and 10,100 levels. A decisive fall below the immediate support level of 9,960 can pull the contract down to 9,930 and then to 9,900 levels. Subsequent supports are placed at 9,875 and 9,850 levels.

Strategy: Go short on rallies with fixed stop-loss at 10,055 levels

Supports: 9,960 and 9,930

Resistances: 10,050 and 10,070

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Published on June 11, 2020
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