Technical Analysis

Nifty Call: Nifty 50 October Futures (11,882)

Yoganand D BL Research Bureau | Updated on October 08, 2020

Taking cues from the positive US markets, the domestic equity benchmark indices - the Sensex and the Nifty 50 commenced the session with a gap-up open.

The Dow Jones and S&P 500 had gained 1.9 per cent and 1.7 per cent respectively in the past session. The Asian markets are mixed in today session, the Nikkei 225 has climbed 0.9 per cent to 23,647 whereas the Hang Seng index has slumped 0.48 per cent to 24,125 levels. Following a gap-up open, the Sensex and the Nifty 50 continued to trend upwards and have gained 1.3 per cent and 1.2 per cent respectively.

The market breadth of the Nifty 50 index is slightly biased towards advances. The India VIX index has gained 2.4 per cent 20.5. The Nifty mid and small-cap indices have climbed marginally, gaining 0.2 per cent and 0.3 per cent respectively.

The Nifty IT index is the top sectoral gainer that has jumped 5.3 per cent on the back of strong rally in the IT stocks namely, Wipro, TCS, Infosys and HCL Tech that have gained in the range of 4.7 per cent to 9 per cent. Buying interest is also seen in the Nifty Bank and PSU Bank indices that have climbed 1.5 per cent each. While selling interest is observed in the Nifty FMCG and Auto indices are marginally trading in the negative territory.

The Nifty 50 October month contract started the session with a gap-up open at 11,823 and continued to trend upwards. The contract faces a key resistance at 11,900. It recorded an intra-day high at 11,897 and slightly trades below this resistance. Hence, traders should tread with caution as the contract faces a vital barrier at 11,900.

A decisive break above this level can push the contract higher to 11,930 and then to 11,950 levels. On the downside, an immediate support is placed at 11,850 and next is at 11,825. A decisive fall below these supports will bring back selling interest or profit booking and drag the contract down to 11,800 and then to 11,775. Next supports are at 11,750 and 11,720 levels. Traders should tread with caution as long as the contract trades below 11,900. Initiate fresh long positions on a strong rally above 11,900 levels.

Strategy: The contract faces a key resistance ahead at 11,900. Tread with caution

Supports: 11,850 and 11,825

Resistances: 11,900 and 11,930

Published on October 08, 2020

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