Technical Analysis

Nifty call: Buy on dips with fixed stop-loss at 10,540 levels

Yoganand D | Updated on February 08, 2018 Published on February 08, 2018

Nifty 50 February Futures (10,596) Taking cues from the positive Asian markets, the Nifty and Sensex started the session in the green and continued to trend upwards. The Nikkei 225 is up 1.13 per cent at 21,890 levels and the Hang Seng index added 0.3 per cent to quote at 30,412 levels.

The Nifty futures contract started the session with a gap-up at 10,501. After marking an intra-day low at 10,469, the contract resumed its up-move, breaching key resistances at 10,500 and 10,550 levels. The contract has registered an intra-day high at 10,618 levels.

The market breadth is biased towards advances. Strong gains by the Nifty mid- and small-cap indices also shows buying interest across segments. The near-term outlook will be bullish as long as the contract trades above 10,550 levels.

Traders can hold their long positions with a fixed stop-loss at 10,540 levels. On continuation of the up-move, the contract can test resistances at 10,600 and 10,620 levels. A further rally beyond the 10,620 level can take the contract higher to the 10,640-10,650 band. On the other hand, key supports are placed at 10,550 and 10,500. An emphatic plunge below the second support level can pull the contract down to 10,470 and 10,450 levels.

Strategy: Buy on dips with a fixed stop-loss at 10,540 levels.

Supports: 10,550 and 10,500

Resistances: 10,600 and 10620

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