Technical Analysis

Nifty Call: Nifty 50 October Futures (18,550)

Akhil Nallamuthu BL Research Bureau | Updated on October 19, 2021

Buy Nifty futures with stop-loss at 18,520 if it rallies above 18,585

Backed by positive Asian markets, the Indian equity benchmark opened today’s session with a considerable gap-up. While there was a dip soon after the open, the indices have managed to recover and stay in the green. The Nifty 50 is up by 0.4 per cent whereas the Sensex is up by 0.5 per cent for the day so far. Among the Asian majors, the Nikkei 225 gained 0.7 per cent, the Hang Seng by 1.2 per cent and the KOSPI by 0.75 per cent.

The market breadth of the Nifty is indicating a positive bias as the advance-decline ratio stands at 27-23 currently. Nevertheless, the mid- and small-cap indices look mixed as some have gained whereas some of them are in the red.

Among the few sectoral indices that are positive today, the Nifty IT is the top gainer, up by 3 per cent followed by the Nifty Financial services index, up by 0.4 per cent. On the other hand, the Nifty Realty is the top loser, down by 2.3 per cent followed by the Nifty PSU Bank index, down by 1.1 per cent.

Futures: Similar to the underlying Nifty 50, the October futures of the index opened with a gap-up at 18,579 against yesterday’s close of 18,495. But unable to build on to the positive open, the contract declined sharply to mark an intraday low of 18,411. However, it soon recovered and is now hovering around 18,550.

Although there are positive factors like the market breadth and the equity markets across Asia being positive, Nifty futures should decisively break out of the resistance at 18,585 in order to see a rally for today. A breach of this level can lift the contract to 18,700. So, traders looking for intraday opportunities can wait and go long once the futures rally beyond 18,585. Stop-loss can be at 18,520.

But in case the contract falls from the current levels, it can find support at 18,520 and 18,480.

Strategy: Buy Nifty futures with stop-loss at 18,520 if it rallies above 18,585.

Supports: 18,520 and 18,480

Resistances: 18,585 and 18,700

Published on October 19, 2021

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