Technical Analysis

Nifty Call: Go short on rallies at 10,455 and 10,480

Gurumurthy K, BL Research Bureau Updated on December 11, 2018

Nifty 50 December Futures (10,422)

The resignation of Reserve Bank of India’s Governor, Urjit Patel, has jolted the Indian markets today, as was expected. As a result, the Nifty 50 futures contract opened with a wide 151-point gap-down. This is the second consecutive day the index futures is posting a gap-down opening of over 150 points.

The contract made a low of 10,352 and has bounced from there. However, the upside is likely to be capped. Key resistances are at 10,460 and in the 10,490-10,500 region. Only a strong break above 10,500 will turn the sentiment positive. But such a strong upmove looks unlikely at the moment.

Fresh sellers are likely to emerge at higher levels and restrict the upside in the short term. As such the contract is likely to reverse lower and decline below 10,400 targeting 10,350 and 10,300 levels.

Broadly, the Nifty 50 futures contract can remain in a range between 10,300 and 10,500 with a bearish bias. An eventual break below 10,300 will drag the contract lower to 10,200.

Traders can make use of rallies to go short at 10,455 and 10,480. Stop-loss can be placed at 10,505 for the target of 10,350. Revise the stop-loss lower to 10,430 as soon as the contract moves down to 10,405.

Strategy: Go short on rallies at 10,455 and 10,480 with a stop-loss at 10,505

Supports: 10,400, 10,350

Resistances: 10,460, 10,500

 

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