Technical Analysis

Nifty Call: Go long on strong rally above 10,180 levels with fixed stop-loss

Yoganand D | Updated on October 23, 2018 Published on October 23, 2018

Nifty 50 October Futures (10,157)

Taking bearish cues from the Asian and US markets, the domestic benchmark indices began the session in a negative territory. The Nikkei 225 tumbled 604 points or 2.7 per cent to 22,010 levels and Hang Seng Index also plunged 785 points or 3 per cent to 25,367 levels in today's session. Both the Sensex and the Nifty started the session with a gap-down open. However, taking support from the intra-day low, the benchmark indices are on a slight recovery mode. The market breadth of the Nifty index is biased towards decline. The volatility index, India VIX has tumbled 6.5 per cent to 19.97 levels.

The Nifty October month futures started the session with a gap-down open at 10,160. But, the contract began to recover after marking an intra-day low at 10,142. That said, key resistance at 10,180 is limiting the upside. Traders should tread with caution as long as the contract is range-bound between 10,140 and 10,180. A strong rally above 10,180 can take the contract higher to 10,200 and then to 10,225 levels in the near term. Traders can consider initiating fresh long positions on a strong rally above 10,180 with a fixed stop-loss. Key supports below 10,140 are at 10,120 and 10,100. Vital resistances above 10,225 are at 10,250 and 10,280 levels.

Strategy: Consider initiating fresh long positions on a strong rally above 10,180 levels with a fixed stop-loss.

Supports: 10,140 and 10,120

Resistances: 10,180 and 10,200

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