Technical Analysis

Nifty Call: Tread with caution as the contract is range-bound

Akhil Nallamuthu BL Research Bureau | Updated on September 30, 2020 Published on September 30, 2020

Nifty 50 October Futures (11,255)

The Nifty 50 and the Sensex are trading higher by 0.25 per cent each. The Asian markets have been mixed today as the Nikkei 225 index has lost 1.5 per cent while the Hang Seng index is up by 0.8 per cent.

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The market breadth of the Nifty 50 index is equally split as the advance-decline ratio stands at 25-25. The mid-cap and the small-cap indices are trading lower, down between 0.2 per cent and 0.4 per cent. Among the sectoral indices, the Nifty FMCG index is the top gainer, up 1.6 per cent, whereas the Nifty metal index is down nearly 2 per cent. The volatility has gone up by about 1 per cent, as indicated by India VIX, the volatility index, which is at 20.

The October futures contract of the Nifty 50 index began today’s session at 11,249 versus yesterday’s close of 11,234. After registering an intraday high of 11,283, the contract has slightly moderated to 11,250 levels. Notably though, the contract has been oscillating between 11,200 and 11,270 for the past two trading sessions. Unless either of these levels is breached, the next leg of trend cannot be confirmed. Until then, traders can stay on the sidelines.

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Immediately above 11,270 is the resistance of 11,300. A breakout of 11,300 can lead to a rally which can lift the contract to 11,375. On the downside, 11,200 is a strong support where the 21-day moving average coincide. Subsequent support level is at 11,150.

Strategy: Tread with caution as the contract is range bound

Resistances 11,300 and 11,375

Supports: 11,200 and 11,150

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Published on September 30, 2020
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