Technical Analysis

Nifty call: Initiate fresh long if the contract breaches 11,370

Akhil Nallamuthu | Updated on August 13, 2020 Published on August 13, 2020

Nifty 50 August futures (11,315)

Even as the Asian markets were mixed, the Indian benchmark indices opened higher on Thursday. But then, the Nifty spot and the Sensex spot indices gradually moderated and are trading near yesterday’s closing price.

Among the major Asian indices, the Nikkei 225 wrapped up today’s session with a gain of about 1.8 per cent. But the Hang Seng index is now trading lower by a quarter per cent and the Shanghai composite index is flat.

The market breadth of the Nifty 50 indicates a bullish bias as the advances-declines ratio stands at 32-18 even though the index per se is flat. On the other hand, the mid-cap and small-cap indices are outperforming the benchmarks today; while the Nifty Midcap 50 is up by 1.4 per cent, and the Nifty Smallcap 50 is up by a little over one per cent. Among the sectoral indices, the Nifty Media index is the top gainer, up by 1.5 per cent, whereas the Nifty PSU bank index is the top loser, down by nearly 0.6 per cent. The volatility index – India VIX – is largely unchanged at 20.75.

The August futures contract of the Nifty 50 began the session with a gap-up at 11,338 versus yesterday’s close of 11,317. After registering an intra-day high of 11,366, the contract softened and is now trading at around 11,315. Though the overall trend is bullish, and the indications so far have been conducive for the bulls, the price level of 11,370 has been acting as a considerable hurdle. So, on the back of this, traders can go long if the index rallies past 11,370. Stop-loss can be at 11,300.

Strategy: Initiate fresh long if the contract breaches 11,370

Supports: 11,240 and 11,200

Resistances: 11,370 and 11,430

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Published on August 13, 2020
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