Nifty call. Nifty Prediction for November 16, 2022: Use dips to go long

As most of the Asian major equity indices are trading lower versus yesterday’s close, the Indian benchmark indices are down as well. The Nifty 50 (18,380) and the Sensex (61,810) are down by about 0.15 per cent each. But note that the broader trend remains bullish, and both the indices have some key support coming up.

That said, the market breadth of the Nifty 50 is showing a bearish bias as the advance/decline ratio stands at 19/31. The mid- and small-cap indices are trading mixed as some have gained, whereas, the remaining, like the benchmarks, are down.

Among the sectors, the Nifty PSU Bank, up by 1.2 per cent, is the top gainer, whereas, the Nifty FMCG is the top loser having lost 0.6 per cent.

Nifty 50 futures

The November futures of the Nifty 50 index opened the day flat at 18,462. It has now slightly moderated to 18,430. But note that, the contract has considerable support at 18,400 and 18,350. Until the support at 18,350 holds, the bias will remain bullish and that will keep the chances of recovery high wherever there are dips.

On the upside, notable resistance levels are at 18,485 and 18,600.

Given that the trend is bullish, one can capitalise the price dips to take fresh long positions.

Trading strategy

Currently trading at 18,430, traders can consider the below alternatives.

Go long on Nifty futures if it appreciates from here and breaks out of 18,460. Place stop-loss at 18,400. When the contract rises past 18,525, revise the stop-loss to 18,475. Exit the longs at 18,590.

Or, if the price dips from the current level, consider initiating fresh longs at 18,400. Add more buys if the contract softens further to 18,350. Place stop-loss at 18,250. On a rally past 18,460, move the stop-loss up to 18,400. Tighten the stop-loss further to 18,475 when the contract goes above 18,525. Liquidate all the longs at 18,590.

Supports: 18,400 and 18,350

Resistance: 18,485 and 18,600

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