Technical Analysis

Nifty call: Short at current level of 17,600

Akhil Nallamuthu | Updated on November 22, 2021

Place stop-loss at 17,725

Nifty 50 November Futures (17,600)

The Indian benchmark indices i.e., the Nifty 50 and the Sensex are down for the day so far amid mixed Asian market. Despite opening the session with a minor gap-up, both Nifty and Sensex started to move downwards and are currently down by about 1.2 per cent each. Nifty is at 17,555 whereas Sensex is at 58,905. Among the Asian majors, ASX 200 lost 0.6 per cent whereas the Nikkei 225 is up by about 0.15 per cent. Hang Seng is down by 0.5 per cent and the KOPSI is up by nearly 1.5 per cent.

The market breadth of the Nifty 50 index is indicating a bearish sentiment as the advance-decline ratio stands at 12-38. Similar to the benchmark, the mid- and small-cap indices are in the red, losing between 1.4 and 2.4 per cent so far. Volatility has shot up as shown by India VIX – up by 5.5 per cent. Among the sectoral indices, barring the Nifty Metal (up by 0.25 per cent), all other indices are down for the day. The Nifty Media and Realty are the top losers, down by 2.7 and 2.5 per cent, respectively.

Futures: The November futures of the Nifty index opened on a flat note at 17,797 versus last week’s close of 17,792. While it marked an intraday high of 17,805, the contract started to descend. It slipped below the supports at 17,700 and 17,660 and is currently hovering around 17,600. The price indicates that the bears are at an advantage and the contract is likely to decline further from the current levels. The immediate supports are at 17,560 and 17,500. Subsequent support is at 17,430.

Traders can short the Nifty futures at current level of 17,600 and sell again if it rises to 17,660. Stop-loss can be placed at 17,725. The contract is likely to drop to 17,500, where one can liquidate the shorts. When the contract slips below 17,560, revise the stop-loss to 17,625.

Strategy: Short at current level of 17,600 and at 17,660. Place stop-loss at 17,725. Liquidate shorts at 17,500. Revise stop-loss to 17,625 if contract drops to 17,560.

Supports: 17,560 and 17,500

Resistances: 17,660 and 17,700

Published on November 22, 2021

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