Technical Analysis

Nifty call: Tread with caution as contract trades in a broad range

Akhil Nallamuthu | Updated on September 26, 2019 Published on September 26, 2019

BL Research Bureau

Nifty 50 September Futures (11,520)

The Nifty 50 index bounced back sharply after a weak session yesterday. The index is trading up by 0.5 per cent today even though the Asian indices are providing mixed cues. Nikkei and Hang Seng are trading with a gain of 0.2 per cent each, but DJ Shanghai is down by 0.8 per cent. Like Nifty, the Sensex too has gained by 0.4 per cent in today’s session.

Most of the stocks in the Nifty 50 index are riding on the positive sentiment; 39 out of the 50 stocks have gone up. India VIX, the volatility index is up today by 2.75 per cent to 16.6 levels. Nifty Metal index and Nifty Auto index are the top performers among the sectoral indices with a gain of 1.5 per cent each, and the top loser in Nifty FMCG index as it has lost 0.5 per cent.

The September expiry futures contract of the Nifty 50 index opened higher at 11,504 against the previous close of 11,469. It registered an intraday high of 11,631 moving beyond the important level at 11,600 briefly. But it slipped below that level subsequently. Observing the daily chart, the contract seems to have formed a broad range between 11,440 and 11,680, and only a breakout of it will result in the next leg of a trend. Being an expiry day, volatility can be higher towards the closure of the session. Hence, traders must tread with caution.

Strategy: Tread with caution as the contract trades within a broad range

Supports: 11,500 and 11,440

Resistances: 11,600 and 11,680

Published on September 26, 2019
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