Technical Analysis

Nifty Call: Sell on rallies with stop-loss at 9,060

Yoganand D BL Research Bureau | Updated on May 22, 2020

Nifty 50 May Futures (8,980)

Taking weak cues from the Asian markets, Sensex and Nifty started the session in negative territory. After an initial rally, the benchmark indices resumed the down-move witnessing selling pressure at higher levels. The Nikkei 225 index has fallen 0.8 per cent to 20,388 and Hang Seng index has nose-dived almost 5 per cent to 23,068 levels in today's session.

The Sensex and Nifty are down by more than 1 per cent. The market breadth of the Nifty index is biased towards declines. The volatility index- India VIX has advanced 2 per cent to 33.6 levels. Nifty mid- and small-cap indices have slumped 0.8 per cent and 0.7 per cent respectively. The Nifty IT index has jumped 1.2 per cent and Nifty media has climbed 0.8 per cent are the two sectoral indices trading in the positive territory. The Nifty PVT Bank index is the top loser that has plunged 3.2 per cent and Nifty Bank has tumbled 2.8 per cent.

The Nifty May month contract commenced the session with a gap-down open at 9,001. After an initial rally the contract recorded an intra-day high at 9,123 and continued to trend downwards breaching the base level at 9,000. The contract recorded an intra-day low at 8,940. The near-term outlook will remain bearish as long as the contract trades below 9,050 level. Traders can make use of intra-day rallies to go short with a stop-loss at 9,060. An emphatic fall below the immediate support level of 8,950 can pull the contract down to 8,925 and then to 8,900. Subsequent supports are at 8,880 and 8,850 levels. On the other hand, a decisive rally above 9,050 can pave way for a corrective rally to 9,080 and then to 9,100. Next key resistances are at 9,125 and 9,150

Strategy: Sell on rallies while maintaining a stop-loss at 9,060 levels

Supports: 8950 and 8,925

Resistances: 9,050 and 9,080

Published on May 22, 2020

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