Technical Analysis

Nifty call: Buy on dips with fixed stop-loss at 11,850

Yoganand D | Updated on June 13, 2019 Published on June 13, 2019

Nifty 50 June futures (11,878)

The Sensex and Nifty began the session with a gap-down open and continued to decline, tracking the bearish Asian markets. The Nikkei 225 has fallen 0.5 per cent to 21,032, and the Hang Seng index has slipped 0.6 per cent to 27,139 levels.

Both the Sensex and the Nifty are on a corrective up-move from their intra-day lows. The market breadth of the Nifty is biased towards declines. The volatility index, India VIX, has slumped 1.4 per cent to 13.93 levels. Both the Nifty mid and small-cap indices have tumbled more than 1 per cent.

The Nifty June month contract started the session with a gap-down open at 11,885. After marking an intra-day high at 11,911, the contract continued to trend downwards. However, after marking an intra-day low at 11,836 levels, the contract is in the recovery mode.

Traders with a near-term view can make use of dips to buy the contract, while maintaining a fixed stop-loss at 11,850 levels. A strong rally above 11,900 can take the contract higher to 11,920 and 11,950 levels. On the downside, a decisive fall below 11,850 will bring back selling pressure and drag the index once again to 11,835 and then to 11,820 levels. In that case, avoid taking long positions. The next key support is at 11,800.

Strategy: Make use of intra-day dips to buy, with a fixed stop-loss at 11,850

Supports: 11,850 and 11,835

Resistances: 11,900 and 11,920

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