Technical Analysis

Nifty call: Go short on intra-day rallies while maintaining stop-loss at 11,190 levels

Yoganand D | Updated on May 14, 2019 Published on May 14, 2019

Nifty 50 May futures (11,158)

The Sensex and the Nifty began the session on a flat note and started to decline thereafter, taking bearish cues from the Asian markets. The Nikkei 225 has slipped 0.57 per cent to 21,070 and the Hang Seng index has declined 1.5 per cent to 28,106 levels in Tuesday’s session.

Both the key benchmark indices continue to hover in negative territory. The market breadth of the Nifty index is biased towards declines. The India VIX has declined 1.5 per cent to 26.98 levels. The Nifty mid- and small-cap indices are resilient and are trading marginally in positive territory. The Nifty IT index is experiencing selling pressure and has slumped 1.7 per cent, while buying interest is witnessed in the Nifty Pharma index, which has advanced 1 per cent.

The Nifty futures started the session in negative territory, opening at 11,170. After a sharp initial decline, the contract recorded an intra-day low at 11,138 and bounced back. The contract marked an intra-day high at 11,184 and slipped into the negative territory again. Key resistance in the band between 11,175 and 11,185 is limiting the upside.

The contract continues to hover in negative territory. As long as the contract trades below 11,185, the near-term stance is bearish. Traders can make use of intra-day rallies to sell the contract with a stop-loss at 11,190. The contract can decline and test supports at 11,150. A decisive fall below this base level can drag the contract down to 11,125 and 11,100.

On the other hand, a strong rally above 11,185 can take the contract higher to 11,200 and then to 11,225 levels. Next resistance is at 11,250 levels.

Strategy: Make use of intra-day rallies to go short while maintaining a stop-loss at 11,190 levels

Supports: 11,150 and 11,125

Resistances: 11,200 and 11,225

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