Technical Analysis

Nifty call: Sell on rallies with stop loss at 12,310

Akhil Nallamuthu, BL Research Bureau | Updated on January 03, 2020 Published on January 03, 2020

Nifty 50 January Futures (12,250)

The Indian benchmarks are witnessing selling pressure in today’s session. The Nifty spot and the Sensex spot index are down by 0.5 per cent each. Noticeably, the January futures contract of the Nifty 50 index has lost 0.8 per cent so far in today session.

The advance-decline of the Nifty index indicate a clear bear trend as the ratio stands at 11-39. There is a spike in volatility as India VIX, the volatility index, has shot up by 8 per cent to 12.40 levels. Most of the sectoral indices are trading lower, hinting a broad based selling. Apart from the Nifty IT (up by 1.5 per cent) and Nifty pharma index (up by 1.1 per cent), all other sectoral indices are down. The Nifty media index is the top loser, down by nearly 2 per cent.

The January futures contract of the Nifty index opened lower at 12,294 versus yesterday’s close of 12,339 and has been on a decline since the session open. The contract is struggling to move past the resistance at 12,350 levels, from where the contract has fallen for third time within a month. Hence, only a close above that level in the daily chart can take the contract higher. Since the contract is trading with a negative bias today, traders can initiate fresh short position on intraday rallies with stop loss at 12,310.

Strategy: Sell on intraday rallies with stop loss at 12,310

Supports: 12,230 and 12,200

Resistances: 12,300 and 12,350

Published on January 03, 2020
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