Technical Analysis

Nifty Active Call: Sell the contract in rallies with a tight stop-loss at 10,135 levels

Yoganand D BL Research Bureau | Updated on January 09, 2018 Published on December 05, 2017

Nifty 50 December Futures (10,117)

Taking bearish cues from negative Asian markets, the domestic benchmark indices, the Nifty and the Sensex, started the session in red.

The US markets had closed on a mixed note on Monday. The Dow Jones advanced 58 points to close at 24,290, while the S&P 500 slipped marginally by 2.7 points to 2,639 levels. Tech stocks’ benchmark Nasdaq Composite index tumbled 72 points or 1 per cent to end at 6,775 levels.

In Asian markets, the Nikkei 225 index fell 84 points or 0.4 per cent to 22,622 and Hang Seng index declined 170 points or 0.6 per cent to 28,967 levels.

The Nifty December futures contract started the session with a gap-down open at 10,126. After an initial corrective up move, the contract marked an intra-day high of 10,145 and continued to decline.

Slipping below the key support level of 10,100, the contract recorded an intra-day low of 10,091. The contract experiences selling pressure at higher levels.

Traders with a short term perspective can sell the contract in rallies while maintaining a fixed stop-loss at 10,135 levels. Resumption of the downtrend and a decisive plunge below the key base level of 10,100 can pull the contract down to 10,075 and then to 10,050 levels.

Key immediate resistances are placed at 10,130 and 10,160. Only a strong rally beyond 10,160 can bring back bullish momentum and take the contract higher to 10,180 and 10,200 levels.

Strategy: Sell the contract in rallies with a tight stop-loss at 10,135 levels.

Supports: 10,100 and 10,075

Resistances: 10,130 and 10,160

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