Technical Analysis

Nifty call: Sell on rallies with fixed stop-loss at 10,210 levels

Yoganand D | Updated on June 09, 2020

Nifty 50 June futures (10,137)

The domestic equity benchmark indices -- Sensex and Nifty -- began the session on a flat note amid mixed cues from the Asian markets. The Japanese index, Nikkei 225, has slipped 0.4 per cent to 23,091, whereas the Hang Seng index has jumped 1.7 per cent to 25,198 in today's session. The US indices -- Dow Jones and S&P 500 index -- had gained 1.7 per cent and 1.2 per cent in the previous session.

After an initial rally, the Sensex and Nifty started to witness selling interest and profit-taking at higher levels. Both the key indices have begun to decline now. The market breadth of the Nifty index is now slightly biased towards declines. The India VIX is up by 0.8 per cent to 29.9 levels. The Nifty mid and small-cap indices are trading mixed.

The Nifty mid-cap index is up by 0.3 per cent, while the small-cap index has fallen 0.4 per cent. The Nifty Pharma is the top gainer, that has advanced 2.3 per cent, along with the Nifty FMGC and realty indices, which have rallied 0.7 per cent and 1.3 per cent respectively. The top loser is Nifty media, which has slumped 1.5 per cent.

The Nifty June futures started the session with a gap-up open at 10,192. Following an initial rally, the contract marked an intra-day high at 10,295 and began to decline. The contract breached its immediate support at 10,200 and has registered an intra-day low at 10,130. The near-term stance has turned bearish now due to selling interest at higher levels.

As long as the contract trades below 10,200, the near term view is bearish. Traders can sell the contract with a fixed stop-loss at 10,210. A decisive fall below the immediate support at 10,130 can drag the contract down to 10,100. A further fall below this base can pull the contract down to 10,075 and 10,050 levels. Resistances above 10,200 are placed at 10,230 and 10,250 levels.

Strategy: Sell on rallies with fixed stop-loss at 10,210 levels

Supports: 10,130 and 10,100

Resistances: 10,200 and 10,230

Published on June 09, 2020

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