Technical Analysis

Nifty call: Go short on break below 10,895, with stop-loss at 10,915

Gurumurthy K Updated on January 02, 2019

Nifty 50 January Futures (10,915)

The Nifty 50 futures contract is trading on a weak note. The index futures opened with a wide 50-point gap-down at 10,911 and fell to a low of 10,872. Though it has bounced back from the day's low, the up-move seems to be lacking strength. It is hovering above 10,900, within a narrow range.

The immediate support is at 10,895. A break below this can take it initially to 10,875. A further break below 10,875 would then increase the likelihood of the contract extending its down-move to 10,850 or even 10,830 thereafter.

Traders can go short on a break below 10,895. Stop-loss can be placed at 10,915 for the target of 10,860. Revise the stop-loss lower to 10,885 as soon as the contract moves down to 10,870.

On the other hand, if the Nifty 50 futures contract manages to sustain above 10,895 and gains momentum, it can test 10,950. A strong break above 10,950 is needed to boost its momentum and take the index futures higher to 11,000 levels.

Strategy: Go short on a break below 10,895, with a stop-loss at 10,915

Supports: 10,895, 10,875

Resistances: 10,950, 11,000

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