Nifty call: Buy in declines with a stop-loss at 10,485

Nifty 50 April Futures (10,508)

The Nifty and Sensex started the session with a gap-up open and continued to trend upwards backed by buying interest witnessed across sectors.

Mid and small-cap sectors gained about 1 per cent today. The India VIX, which measures the degree of volatility, has slipped 3.9 per cent to 13.98 levels indicating that the fear factor is less in the markets.

Nifty April futures contract began the session with a gap-up open at 10,481. After marking an intra-day low at 10,472, the contract resumed its upmove and breached the key resistance at 10,500. It has recorded an intra-day high at 10,527.

The near-term outlook remains bullish as long as the contract trades above the key support in the band between 10,490 and 10,500. The market breadth of the Nifty index is biased towards advances.

Traders with a near-term view can buy the contract with a stop-loss at 10,485 levels. The contract can extend its uptrend and test resistances at 10,530 and then at 10,550 in the near term.

A strong breach of the second resistance can push the contract higher to 10,575 and 10,600 levels.

Conversely, if the contract slips below 10,490-10,500 band decisively, profit booking can emerge and it can decline to 10,475 or even to 10,450 levels. Subsequent supports are placed at 10,425 and 10,400. 

Strategy: Buy in declines while maintaining a stop-loss at 10,485

Supports: 10,490 and 10,475

Resistances: 10,530 and 10,550

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