Technical Analysis

Nifty Call: Tread with caution till contract is between 11,700 and 11,750 levels

Yoganand D, BL Research Bureau | Updated on February 26, 2020 Published on February 26, 2020

Nifty 50 February Futures (11,727)

Tracking the bearish global cues, the Sensex and the Nifty began the session with a gap-down opening. The US market continued to plummet on escalating Coronavirus fears; Dow Jones tumbled 3 per cent in the last session. Asian markets also extended their fall, the Nikkei 225 index slumped 0.8 per cent to 22,426 levels and Hang Seng index also dropped 0.8 per cent to 26,668 levels in today's session.

Both the Sensex and the Nifty have declined 0.57 per cent and 0.6 per cent respectively so far. The market breadth of the Nifty index is biased towards declines. The India VIX has gained 1.7 per cent to 17.2 levels. The Nifty mid- and small-cap indices have fallen 0.4 per cent and 0.12 per cent correspondingly.

The Nifty February month contract commenced the session with a gap-down opening at 11,739 levels. After marking an intra-day high at 11,763 levels, the contract breached a key support at 11,750 and registered an intra-day low at 11,702 levels. The significant support at 11,700 is providing a vital base. A slump below this level can drag the contract down to 11,675 and then to 11,650 levels.

Immediate resistances are at 11,750 and 11,775 levels. Only a strong rally above 11,775 levels can take the contract higher to 11,800 and then to 11,825 levels. Traders should tread with caution as long as the contract is range-bound between 11,700 and 11,750 levels. Go short on a fall below 11,700 level with a fixed stop-loss.

Strategy: Traders should tread with caution as long as the contract is range-bound between 11,700 and 11,750 levels

Supports: 11,700 and 11,675

Resistances: 11,750 and 11,775

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Published on February 26, 2020
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