Technical Analysis

Nifty Call: Sell on rallies with tight stop-loss

Akhil Nallamuthu BL Research Bureau | Updated on November 04, 2019

Nifty 50 November Futures (11,910)

The bulls appear to have hit a wall, as the index struggles to move up. After facing a late sell-off on Thursday, it opened flat today and after a minor decline it is currently trading near yesterday’s closing level. Asian indices are showing mixed signals as Nikkei is marginally down while Hang Seng is trading slightly higher. Like the Nifty, the Sensex is also trading flat for the day.

The flattish trend is confirmed by the advance-decline ratio of the Nifty 50 index. Gainers and losers in Nifty 50 index are almost equally split at 26-24. There is not much change in volatility compared to yesterday. The volatility index, India VIX is at 16.3 which is 0.9 per cent lower against Thursday’s close. Barring the Nifty IT index, all other sectoral indices are in the green which is a good sign on the broader market level. Nifty Media index is the top performer  gaining 4.5 per cent.

The November futures of the Nifty 50 index is hovering around the key level of 11,900, amid a tough tussle between the bulls and the bears. As long as the index stays above 11,900, bulls have a good chance of gaining traction. But prolonged sluggishness at current price levels might result in profit booking leading to a correction. Hence, traders should be cautiously bearish and sell on rallies with tight stop-loss.

Strategy: Sell on rallies with tight stop-loss

Supports: 11,865 and 11,832

Resistances: 11,966 and 12,000

Published on November 01, 2019

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