Technical Analysis

Nifty Call: Tread with caution, contract is range-bound

Yoganand D BL Research Bureau | Updated on May 21, 2020

Nifty 50 May Futures (9,108)

The Sensex and Nifty started the session on positive note and continued to trade in the positive zone despite weak Asian markets. The Nikkei 225 has declined by 0.2 per cent to 20,552 and Hang Seng index has slumped 0.6 per cent to 24,249 in today's session. Both the Sensex and Nifty have gained 0.7 per cent each. Market breadth of the Nifty 50 index is biased towards advances. On the other hand, India VIX has tumbled 7 per cent to 33.3 levels. The Nifty mid-cap and Nifty small-cap indices have surged 1.4 per cent and 1.27 per cent respectively. All the sectroal indices are trading in the positive territory. Top gainers are Nifty PSU Bank and Nifty auto that have advanced 2.8 per cent and 2.5 per cent respectively.

The Nifty May month contract commenced the session almost on flat note at 9,068. Recording an intra-day low at 9,046 the contract resumed the up-move and surpassed the immediate resistance at 9,100. But, it started to witness selling pressure at higher levels, recording an intra-day high at 9,139 levels. The contract is range-bound between 9080 and 9,130. Traders should tread with caution as long as the contract is range-bound. Fresh short positions can be initiated with a stiff stop-loss on a fall below 9,080 levels. In that case, the contract can decline to 9,060 and then to 9,045 levels. A further fall below the second support can drag the contract down to 9,025 and 9,000 levels. Key resistances on a strong rally above 9,135 are at 9,150 and 9,175 levels.

Strategy: The contract is range-bound, tread with caution

Supports: 9080 and 9,060

Resistances: 9,135 and 9,150

Published on May 21, 2020

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