Technical Analysis

Nifty call: Initiate short with stop-loss at 12,000

Akhil Nallamuthu | Updated on February 18, 2020

BL Research Bureau

Nifty 50 February Futures (11,950)

Following the negative cues from the Asian markets, the Indian benchmarks are trading lower today. The Nifty spot and the Sensex spot indices are down by nearly one per cent each. While the Nikkei 225 index has slipped by 1.4 per cent, the Hang Seng index is down by 1.5 per cent.

The advance-decline ratio of the Nifty 50 index, at 7-43, indicates a strong downtrend. All mid-cap and small-cap indices have lost more than one per cent today. Led by the Nifty PSU bank index (down by 3.1 per cent), all the sectoral indices are down, except the Nifty media index (up by 0.6 per cent).

The volatility has gone up as shown by the volatility index, India VIX. It has gone up by 1.2 per cent to 14.58 levels.

The February futures of the Nifty index opened the session lower at 12,025 compared to previous close of 12,074. The contract then declined and fell below the important level of 12,000 and is currently trading at 11,950. As the overall market seems to be under pressure, the contract can be expected to weaken further from current levels. Hence, traders can initiate short position with a stop-loss of 12,000 on rallies.

Strategy: Initiate short positions with stop-loss at 12,000

Supports: 11,900 and 11,855

Resistances: 12,000 and 12,060

Published on February 18, 2020

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