Technical Analysis

Nifty call: Sell the contract if it breaks below 11,130

Akhil Nallamuthu | Updated on September 23, 2020 Published on September 23, 2020

Nifty 50 September Futures (11,155)

Even as the Asian markets look mixed, the Indian benchmark indices began the session with a gap-up open. The Nikkei 225 has ended the session flat whereas the Hang Seng is down by quarter per cent and the Shanghai composite index is up by 0.2 per cent.

The Nifty 50 and the Sensex indices, after opening on the front foot, has not been able to rally further and has been witnessing a decline. Both the index, which were up by about 1 per cent for the day at its respective peak, has declined and are now trading near yesterday’ closing level.

The market breadth of the Nifty 50 index indicates a bearish bias as the advance-decline ratio stands at 17-33. The mid-cap and the small-cap indices are trading with downward inclination. Among the sectoral indices, the Nifty financial services index is the top performer, up by 0.3 per cent, whereas the Nifty media index is the biggest loser, down by nearly 3 per cent.

The September futures contract of the Nifty 50 index opened the session considerably higher at 11,237 versus yesterday’s close of 11,162. But after marking an intraday high of 11,245, the contract began to decline sharply and is currently trading near 11,155. The intraday price action looks bearish, but 11,130 can act as a support. Hence, traders can initiate fresh short positions with stop-loss at 11,180 if the contract breaches the support of 11,130.

A break below 11,130 can drag the index towards 11,100. Subsequent support levels are at 11,060 and 11,000

Strategy: Sell the contract if it breaks below 11,130

Supports: 11,130 and 11,100

Resistances: 11,180 and 11,210

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Published on September 23, 2020
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