Technical Analysis

Nifty Call: Tread with caution as it trades around a key level

Akhil Nallamuthu BL Research Bureau | Updated on November 21, 2019

Nifty 50 November Futures (12,000)

After the sell-off in the latter part of yesterday’s session, the November futures contract of the Nifty 50 index declined in the initial hour of trade today. However, it has recovered from its intraday low of 11,982 and is currently trading around the important level of 12,000. On Wednesday, the index tested the upper boundary of the 11,835-12,070 range (at 12,066).

Equity markets across the globe are declining. The US market closed with a loss yesterday and the Asian markets are also on a decline. The Nikkei has lost half a percentage point today and the Hang Seng is down by 0.75 per cent. This may weigh on the Indian benchmarks.

Looking at the market breadth of the Nifty 50 index, it indicates weakness as 30 out of the 50 stocks in the index have lost in today’s session. The Nifty media index is the top performer among sectoral indices as it has gained 3.8 per cent today, whereas the Nifty metal is the top loser, down by nearly one per cent.

Though the November futures of the Nifty 50 index has recovered from its intraday low-- aligning with the recent uptrend-- one need to be cautious as it approaches the upper boundary of the range. Also, the equity markets are facing pressure as indicated by other major global indices. The contract is hovering around the key level at 12,000 and the trend seems to be unclear. Traders must remain cautious, as the index-- caught between the bulls and the bears---can remain range bound through the day.

Strategy: Tread with caution as it trades around a key level

Supports: 11,935 and 11,900

Resistances: 12,070 and 12,126

Published on November 21, 2019

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