Technical Analysis

Nifty call: Go short with fixed stop-loss if contract declines below 14,800 levels

Yoganand D | Updated on March 02, 2021

Nifty 50 March Futures (14,840)

The Sensex and the Nifty 50 commenced the session with a gap-up open despite weak Asian markets. The Nikkei 225 has declined 0.8 per cent to 29,408 and the Hang Seng index has slumped 0.96 per cent to 29,170 levels in today's session.

Following an initial rally, both the Sensex and the Nifty gave up their intra-day gains and marginally touched negative territory. But the indices have recovered slightly from their intraday lows; the Sensex has climbed 0.24 per cent and the Nifty 0.35 per cent so far. The market breadth of the Nifty 50 is biased towards advances. The India VIX has plummeted 4 per cent to 24.5 levels. Both the Nifty mid and small-cap indices have advanced 0.9 per cent and 0.67 per cent respectively. Among the sectoral indices, the Nifty Auto and IT indices are the top gainers, which have jumped 2.2 per cent and 2 per cent respectively. Selling interest is seen in the Nifty Financial Service and Nifty Bank that have fallen about 0.5 per cent each.

The Nifty 50 March month contract started the session with a gap-up open at 14,845. After marking an intra-day high at 14,960 the contract began to decline, witnessing selling interest at higher levels. It has slipped below 14,900 levels and currently trades at around 14,820 levels. The key support at 14,800 is providing a base for the contract.

A strong fall below this base can pull the contract down to 14,775 and then to 14,750 levels. Next key supports are at 14,730 and 14,700 levels. Resistances are at 14,850 and 14,880 levels. A strong rally above 14,880 can take the contract higher to test the vital barrier at 14,900 levels. As long as the contract trades above 14,800 levels, traders should tread with caution. Fresh short positions can be initiated on a strong fall below 14,800 levels with a fixed stop-loss.

Strategy: Go short with a fixed stop-loss only if the contract declines below 14,800 levels

Supports: 14,800 and 14,775

Resistances: 14,850 and 14,880

Published on March 02, 2021

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