Technical Analysis

Nifty Call: Sell on rallies with stop-loss at 11,975

Yoganand D BL Research Bureau | Updated on February 24, 2020 Published on February 24, 2020

Nifty 50 February Futures (11,932)

The Sensex and the Nifty commenced the session with a gap-down opening, tracking the weak global cues. The Hang Seng index has slumped 446 points or 1.6 per cent to 26,858 in today's session. S&P 500 index had declined 1 per cent on Friday. Both the Sensex and the Nifty has tumbled about 1 per cent each on the back of selling pressure. The market breadth of the Nifty index is biased towards declines. On the other hand, the India VIX- the volatility index has jumped 11.5 per cent to 15.28 levels indicating high volatility. The Nifty mid and small-cap indices have declined 0.6 per cent each. Apart from the Nifty IT index which is marginally hovering in the positive territory, all other sectoral indices are trading in the red. The Nifty metal index is the top loser that has plunged 3.3 per cent.

The Nifty February month contract started the session with a large gap-down opening at 11,950. After an initial rally to the intra-day high of 11,969 the contract began to decline. However, it found support at 11,900 and recovered marginally. Overall, the trend is negative for the contract. As long as it trades below 12,000 the near term outlook will remain bearish. Traders can make use of rallies to sell the contract with a fixed stop-loss at 11,975 levels. A decisive fall below the immediate support level of 11,900 can pull the contact down to 11,875 and 11,850 levels. Key immediate resistances are at 11,970 and 12,000. Only a decisive rally above 12,000 can witness a corrective rally to 12,025 and then to 12,050 levels.

Strategy: Sell on rallies with a stop-loss at 11,975 levels

Supports: 11,900 and 11,875

Resistances: 11,970 and 12,000

Published on February 24, 2020
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