Technical Analysis

Nifty call: Short at current level of 17,580 with stop-loss at 17,680

Akhil Nallamuthu | Updated on November 24, 2021

Nifty 50 November Futures (17,580)

Despite the Asian markets sending out mixed signal, the Indian benchmark indices began the session with a gap-up open. The Nifty 50 and the Sensex rallied post opening and are now up by about 0.3 per cent each so far. Nifty is at 17,565 and Sensex is at 58,845.

In line with positive inclination, the market breadth of the Nifty 50 is indicating bullishness as the advance-decline ratio stands at 31-19 and all mid- and small-cap indices are in the green, gaining between 0.5 and 1.4 per cent. Most of the sectoral indices are also up for the day with the Nifty Media as the top gainer, up by 2.4 per cent. This is followed by the Nifty PSU bank index, up by 1.6 per cent. Among the very few losers, the Nifty Auto saw a decline of nearly 0.5 per cent followed by the Nifty IT, down by 0.45 per cent.

Futures: Like the underlying Nifty 50, the November futures of the index opened with a gap-up at 17,548 as against yesterday’s close of 17,495. It then rallied to mark an intraday high of 17,598 and is currently hovering around 17,580. Although the contract is positive for the day, the short-term trend remains bearish. It should breach the resistance of 17,680 for trend to turn bullish. Also, the contract is likely to face resistance at 17,630.

Hence, traders can consider selling the contract at current level of 17,580 and short again at 17,630. Stop-loss can be placed at 17,680 initially. We expect the contract to reverse lower at current level or at 17,630 and fall to 17,500. It then could extend the decline to 17,430. Traders can revise the stop-loss to 17,580 if the contract falls below 17,500. Exit the shorts at 17,430.

Strategy: Short at current level of 17,580 and at 17,630 with initial stop-loss at 17,680. Shift the stop-loss to 17,580 if futures decline below 17,500. Exit at 17,430.

Supports: 17,500 and 17,430

Resistances: 17,630 and 17,680

Published on November 24, 2021

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