Technical Analysis

Nifty Call: Sell on rallies maintaining stop-loss at 11,010 levels

Yoganand D | Updated on September 24, 2020 Published on September 24, 2020

Nifty 50 September Futures (10,927)

Taking cues from the bearish global market, the Sensex and the Nifty 50 have commenced the session with a gap-down open and continued to chart downwards. Last session, the Dow Jones had tumbled 1.9 per cent to 26,763, and S&P 500 had slumped 2.4 per cent to 3,236 levels. Nikkei 225 has declined 1.1 per cent to 23,087, and Heng Seng index has plunged 1.9 per cent to 23,294 levels in today's session. Both the Sensex and the Nifty 50 indices have fallen about 2 per cent each and have breached key supports. The market breadth of the Nifty 50 index is biased towards declines. On the other hand, the India VIX has jumped 7.4 per cent to 22.5, implying an increase in volatility. The Nifty mid and small-cap indices have plummeted 2.2 per cent and 2.6 per cent respectively. All the sectoral indices are trading in the negative territory. Top losers are Nifty IT and Nifty PSU Bank which have plunged 3.3 per cent each.

The September month index futures contract began the session with a gap-down open at 11,012. After an initial rally to 11,020 the contract resumed the downtrend and breached key support at 11,000. It has declined by 2 per cent. Though the contract marked an intra-day low at 10,891 and recovered marginally but it is witnessing selling interest at higher levels. The near-term outlook will remain bearish as long as the contract trades below 11,000. Traders with a near-term view can sell the contract on rallies with a stop-loss at 11,010. A decisive fall below the immediate support at 10,900 can drag the contract down to 10,875 and then to 10,850 levels. Key resistances above 11,000 are at 11,025 and 11,050. A strong up-move beyond 11,050 can lead to a corrective rally to 11,080 and 11,100 levels.

Strategy: Sell on rallies while maintaining a stop-loss at 11,010 levels

Supports: 10,900 and 10,875

Resistances: 11,000 and 11,025

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Published on September 24, 2020
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