Technical Analysis

Nifty Call: Sell on rallies with a fixed stop-loss at 11,610

Yoganand D BL Research Bureau | Updated on October 30, 2020 Published on October 30, 2020

Nifty 50 November Futures (11,536)

Despite weak Asian markets, the domestic equity indices, the Sensex and the Nifty 50, began the session on a flat note and started to trend upwards. The Nikkei 225 has slipped 0.5 per cent and Hang Seng index almost flat in today's session.

The Sensex and the Nifty 50 climbed about 0.5 per cent each during initial hours. But the benchmark indices witnessed selling interest at higher levels and began to decline and have slumped nearly 1 per cent. The market breadth of the Nifty 50 index is biased towards declines. There is an increase in volatility as the India VIX has jumped 9 per cent to 26.2 levels.

Also read: Hindustan Petroleum Corporation (₹179.6): Buy

The Nifty 50 November month contract started the session with a gap-down open at 11,649. After marking an intraday high at 11,746 the contract started to experience selling interest and began to decline. It breached the key supports at 11,700 and 11,600.

The near-term stance remains bearish as long as the contract trades below 11,600 levels. Traders can make use of intraday rallies to initiate fresh short positions with a fixed stop-loss at 11,610. A conclusive fall below the immediate base level of 11,500 can pull the contract down to 11,470 and then to 11,450 levels.

On the other hand, a decisive rally above the immediate resistance levels of 11,600 can witness a corrective rally and take the contract northwards to 11,650 and 11,675 levels. In that case, traders should avoid taking fresh short positions.

Strategy: Sell on rallies with a fixed stop-loss at 11,610

Supports: 11,500 and 11,470

Resistances: 11,600 and 11,650

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Published on October 30, 2020
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