The Nifty Call: Nifty 50 April Futures (17,170)

Akhil Nallamuthu |BL Research Bureau | Updated on: Apr 26, 2022

The contract might reverse before rallying to 17250

Major Asian indices, barring ASX 200, which is down by 2 per cent, are in the green. Nikkei 225, Hang Seng and KOSPI are up between 0.4 and 1.5 per cent. Following this, the Indian benchmark indices, Nifty 50 and Sensex, at 17,140 and 57,160 respectively, are up by a little over 1 per cent each.

The market breadth of the Nifty 50 is postive at the advance/decline ratio is at 46-4. Like the benchmarks, all the mid- and small-cap indices are positive where almost all indices are by over 1 per cent. All the sectoral indices are trading up led by the Nifty Auto and Realty index, up by 2.2 and 1.9 per cent, respectively.

Futures

The April futures of the Nifty 50 index opened today’s session slightly lower at 17,125 versus yesterday’s close of 16,958. Post opening, the contract moved up to mark an intraday high of 17,193 and is now trading at around 17,170. The nearest support is at 17,085 and the nearest resistance is at 17,250. Although the intraday trend so far has been positive, the rally may not extend beyond 17,250. In fact, the contract might even reverse before rallying to that level.

Therefore, traders can initiate fresh short positions when the contract rallies to 17,200 and short more when the up move extends to 17,250. Place initial stop-loss at 17,325. On the downside, when the contract slips below 17,085, move the stop-loss down to 17,200. Book three-fourth of the shorts when price touches 17,000 and then tighten the stop-loss to 17,100. Liquidate the remaining at 16,900.

Strategy

Initiate fresh short positions when the contract rallies to 17,200 and short more when the up move extends to 17,250. Place initial stop-loss at 17,325. On the downside, when the contract slips below 17,085, move the stop-loss down to 17,200. Book three-fourth of the shorts when price touches 17,000 and then tighten the stop-loss to 17,100. Liquidate the remaining at 16,900.

Supports: 17,085 and 17,000

Resistances: 17,200 and 17,250

Published on April 26, 2022
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