Technical Analysis

Nifty call: Initiate fresh short positions with stop-loss at 10,850

Akhil Nallamuthu | Updated on July 17, 2020 Published on July 17, 2020

Nifty 50 July futures (10,800)

Despite mixed cues from the Asian market, the Indian benchmarks opened higher and have been rallying so far. The Nifty 50 spot and the Sensex spot indices are up by 0.75 per cent and 0.5 per cent, respectively. Notably, both the indices are trading near their respective resistance levels.

Among the major Asian indices, the Nikkei 225 index ended the session 0.3 per cent lower, while the Hang Seng index was up by 0.5 per cent, and the Shanghai composite index was trading flat.

The market breadth of the Nifty 50 index hints at a bull trend as 39 of the 50 stocks have gained so far today. Not only the benchmarks, but the mid-cap and small-cap indices are also in the green. Consequently, all the sectoral indices are in the green, except the Nifty IT index (down by 0.6 per cent). The Nifty metal index is the top gainer, up by 2.2 per cent, followed by the Nifty auto index, up by 1.3 per cent. Volatility as indicated by the volatility index, India VIX, has dropped by nearly 3 per cent.

After opening marginally higher, the July futures contract of the Nifty 50 index has rallied since the session open. However, it is currently facing a resistance band between 10,800 and 10,820. The price area is a substantial resistance and the contract was rejected sharply from these levels on Wednesday. So, unless it breaks out of 10,820, the chances of a decline are higher as it continues to hover at this level. Hence, for intraday, traders can initiate fresh short positions with stop-loss at 10,850.

Strategy: Initiate fresh short positions with stop-loss at 10,850

Supports: 10,740 and 10,700

Resistances: 10,820 and 10,850

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Published on July 17, 2020
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