Technical Analysis

Nifty call: Buy on declines with stop-loss at 10,935 levels

Yoganand D | Updated on February 05, 2019 Published on February 05, 2019

Nifty 50 February futures (10,961)  The Sensex and Nifty began the session on a flat note following mixed global cues, but subsequently gained momentum.

The US markets closed the last session on a positive note, with the Dow Jones gaining 0.7 per cent to 25,239. But the Asian markets were flat. The Nikkei 225 has slipped 39 points to 20,844 in today's session. The Sensex and the Nifty have advanced 0.25 per cent each.

The market breadth of the Nifty index is biased towards advances. Both the Nifty mid and small-cap indices are hovering in negative territory, down 0.2 per cent and 0.4 per cent respectively. Buying interest is seen in the Nifty Auto and Media sectoral indices, which have gained 0.9 per cent and 1.7 per cent respectively.

The Nifty February futures contract started the session at 10,938. After an initial decline to the intra-day low of 10,911, the contract bounced back strongly to mark an intra-day high at 10,970.

The contract can test resistance at 11,000. A strong break above this level can take the contract higher to 11,025 and 11,050 levels. On the other hand, a decisive plunge below the key support level of 10,900 will alter the positive outlook and drag the contract down to 10,875 and 10,850 levels.

Key immediate supports are at 10,940 and 10,920. Traders can buy on dips, with a fixed stop-loss at 10,935 levels.

Strategy: Buy on declines with stop-loss at 10,935 levels

Supports: 10,940 and 10,920

Resistances: 11,000 and 11,025

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