Technical Analysis

Nifty call: Short at current levels with stop-loss at 17,150

Akhil Nallamuthu | Updated on: Nov 30, 2021
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Book profit when contract drops to 16,850 and revise stop-loss to 17,000 when futures fall below 16,900.

BL Research Bureau

Nifty 50 December Futures (17,040)

Following the mixed cues from the Asian markets, the Indian benchmark indices began the session flat. While it rallied initially, the gains were given up and the Nifty 50 and the Sensex are now down by 0.2 per cent each for the day. Among the Asian indices, ASX 200 closed with a gain of 0.22 per cent, Nikkei 225 lost 1 per cent, and Hang Seng is down by 2 per cent.

Since the market declined, the market breadth of the Nifty 50 index is staying negative i.e. the advance-decline ratio is at 19-31. Similar to the benchmarks, the mid-and small-cap indices are trading in the green, gaining between 0.8 and 1.5 per cent. Among the sectoral indices, apart from the Nifty Pharma index (down by 0.16 per cent), all other indices are up led by the Nifty Realty, up by 2.2 per cent.

Futures: The Nifty December futures began the session almost flat at 17,090 as against yesterday’s close of 17,095. Although it rallied and marked an intraday high of 17,347, the contract abruptly reversed the trend and has lost all the intraday gains and is now approaching the support at 17,000. The futures was not able to sustain above the key level of 17,300 and the pace of the decline shows that a decline below 17,000 is highly likely. Moreover, the near-term trend is bearish.

Given the above factors, traders can short the contract at the current level and short again at 17,100. Place initial stop-loss at 17,150. On the downside, the contract is expected to touch 16,850. Thus, one can book profits at this level. When the contract slips below 16,900, shift the stop-loss to 17,000.

Strategy: Short at current level of 17,040 and at 17,100. Initial stop-loss at 17,150. Book profit when contract drops to 16,850. Revise stop-loss to 17,000 when futures drop below 16,900.

Supports : 17,000 and 16,850

Resistances: 17,100 and 17,150

Published on November 30, 2021

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