Technical Analysis

The Nifty call: Make use of rallies to go short

Yoganand D BL Research Bureau | Updated on January 09, 2018

Nifty 50 November Futures (10,250)

The Nifty November futures contract started the session in red, opening at 10,259. After marking an intra-day high of 10278, the contract began to decline witnessing selling pressure. Also, the Asian markets turned negative following a positive start. The Nikkei 225 is trading at 22,380 and Hang Seng index is hovering at 29,156 with negative bias. The underlying Nifty index is also experiencing selling interest at higher levels. The advances/declines ratio of the index is biased towards declines.

With the Nifty futures trading at higher premium compared to the underlying, there is potential of the contract declining further in the near term. Traders with a near-term perspective can make use of the intra-day rallies to go short with a stop-loss at 10,270 levels. Resumption of the down move can pull the contract down to 10,230 once again. Further fall below this level can pull the contract lower to 10,210 or 10,200 levels. On the other hand, key resistances are at 10,260 and 10,280 levels. A strong rally beyond 10,280 is needed to alter the bearish momentum and take the contract northwards to 10,300 and 10,325 levels.

Strategy: Make use of rallies to go short with a fixed stop-loss at 10,270 levels

Supports: 10,230 and 10,210

Resistances: 10,260 and 10,280

Published on November 14, 2017

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