Technical Analysis

Nifty Call: Sell on rallies with a fixed stop-loss

Yoganand D | Updated on March 18, 2020 Published on March 18, 2020

Nifty 50 March Futures (8,546)

Taking bullish cues from the US markets and the positive opening of the Asian markets, the domestic indices - the Sensex and the Nifty -- started the session with an upward gap. But, eventual decline in the Asian markets, have triggered a sell-off and the Sensex and the Nifty have slumped over 4 per cent each so far. The Nikkei 225 index has declined 1.6 per cent and Hang Seng index has plunged 3.6 per cent in today's session. The market breadth of the Nifty is towards declines. The India VIX has gained 1.2 per cent at 63.7 levels. Both the Nifty mid and small-cap indices have plummeted 5.8 per cent and 5.7 per cent respectively. All the sectoral indices are trading in the negative territory, dragged by Nifty private bank index which has nose-dived 7.7 per cent.

The Nifty March month contract commenced the session with a gap-up open at 9,040. After recording an intra-day high at 9,070 the contract began to decline witnessing selling pressure at higher levels. Breaking key support at 8,700 and 8,600, the contract marked an intra-day low at 8,470. The near-term outlook for the session stays bearish as long as the contract trades below 8,700 levels. A corrective rally can be seen if the contract decisively moves above 8,700 levels, that can take the contract higher to 8,750 and 8,800 levels. Next resistances are at 8,870 and 8,915. On the downside, a fall below the immediate key support level of 8,500 can pull the contract down to 8,470 and then to 8,430 or even to 8,400 levels. Traders can sell on rallies with a fixed stop-loss until a strong rally above 8,700 is seen.

Strategy: Sell on rallies with a fixed stop-loss

Supports: 8,500 and 8,470

Resistances: 8,600 and 8,700


Published on March 18, 2020
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