Technical Analysis

Nifty Call: Sell on rallies with stop-loss at 11,560

Yoganand D BL Research Bureau | Updated on September 17, 2020 Published on September 17, 2020

Nifty 50 September Futures (11,509)

Tracking the weak Asian markets, the domestic equity indices - Sensex and Nifty 50 commenced the session with a gap-down open and continued to trend downwards. The Nikkei 225 has slipped 0.7 per cent to 23,319 and Hang Seng index has tumbled 1.7 per cent to 24,300 levels in today's session.

Both, Sensex and Nifty 50 have declined about 0.65 per cent each. The market breadth of the Nifty 50 index is biased towards declines. On the other hand, there is an increase in volatility as the India VIX has jumped 3.5 per cent to 20.3 levels. Both Nifty mid and small-cap indices have declined 0.5 per cent and 0.8 per cent respectively. Among the secotral indices, Nifty pharma and IT that are trading in positive territory marginally gaining 0.5 per cent and 0.36 per cent respectively. Top secotral losers are Nifty metal and realty that have fallen 1.6 per cent and 1.3 per cent correspondingly.

The Nifty September month contract started the session with a gap-down open at 11,521.Following an intra-day rally to 11,578 the contract continued to trend downwards and slipped below 11,500 to mark an intra-day low at 11,483. The contract has now moved above 11,500 and trades at around 11,510. The contract is experiencing selling interest at higher levels. As long as the contract trades below 11,550 the near-term stance will remain bearish. Traders can make use of intra-day rallies to sell the contract with a stop-loss at 11,560. A decisive fall below 11,500 can pull the contract down to 11,480 and 11,450 levels. Key resistances above 11,550 are at 11,580 and 11,600.

Strategy: Sell on rallies with a fixed stop-loss at 11,560 levels

Supports: 11,500 and 11,480

Resistances: 11,550 and 11,580

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Published on September 17, 2020
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