Nifty call: Buy on declines with fixed stop-loss at 11,750 levels

Nifty 50 May futures (11,772)

The Sensex and the Nifty commenced the session in negative territory and began to decline immediately. After a sharp fall, the benchmark indices found support at the intra-day low and have been in a recovery mode.

The Nifty mid- and small-cap indices have slumped 1.3 per cent each. Selling pressure has been witnessed in the Nifty Auto and Realty indices too, that have declined 1.6 per cent and 2.8 per cent respectively. The Nifty Bank has slumped 1 per cent. However, the Nifty IT, media and metal indices are experiencing buying interest and are trading in the green. Following an initial rally, the India VIX has erased its initial gains and is up by just 1.7 per cent at 22.08 levels.

The Nifty May month contract started the session in the red, opening at 11,805. It began to decline after recording an intra-day high at 11,838. The contract breached key support at 11,750 and marked an intra-day low at 11,712. But the contract has been in a recovery mode since marking its intra-day low.

The contract has breached key resistance at 11,750 and is likely to test the next resistance at 11,800. Traders can make use of intra-day dips to buy the contract, while maintaining a fixed stop-loss at 11,750 levels. A strong rally above 11,800 can take the contract higher to 11,820 and 11,840 levels. On the other hand, a decisive fall below 11,750 can drag the contract down to 11,725 and then to 11,700 levels.

Strategy: Buy on declines with a fixed stop-loss at 11,750 levels

Supports: 11,750 and 11,725

Resistances: 11,800 and 11,820

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