Technical Analysis

Nifty call: Initiate short positions on rallies with 12,065 as stop-loss

Akhil Nallamuthu December 4 | Updated on December 04, 2019

File photo

Nifty 50 December Futures (12,030)

Equity markets across the globe seem bearish this session. The US benchmarks closed lower yesterday and the Asian market, taking cues from US, has been on a decline since this morning. The Nikkei and the Hang Seng are trading lower, each down by one percentage point. However, Indian benchmarks i.e. the Nifty and the Sensex, rallied after an initial dip, and are currently hovering around their respective resistance levels. For the recovery to be sustainable, the indices have to breakout of those hurdles.

The market breadth of the Nifty 50 index does not indicate a trend as the advance-decline ratio is at 26-24. But the volatility has gone up by 2.5 per cent to 14.9 levels, which might be an indication of a negative bias, as generally higher volatility is associated with bear trend.

Among the sectoral indices, barring the Nifty Metal index (down by 0.5 per cent) and the Nifty FMCG index (down by 0.2 per cent), all other indices are in the green today. The Nifty IT index is the top performer, gaining 1 per cent.

The December futures contract of the Nifty 50 index opened the session lower at 12,009 against the previous close of 12,046. After making a low of 11,983, the futures rallied and is currently trading at 12,030. However, it faces a stiff resistance at 12,055 and until the contract trades below that level, it can be approached with a bearish bias. So, traders are recommended to initiate short positions on rallies with 12,065 as stop-loss.

Strategy: Initiate short positions on rallies with 12,065 as stop-loss

Supports: 11,975 and 11,930

Resistances: 12,055 and 12,110

Published on December 04, 2019

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