Technical Analysis

Nifty Call: Go short on rallies at 10,585 and 10,600

Gurumurthy K Updated on December 10, 2018

Nifty 50 December Futures (10,567)

Benchmark indices have begun the week on a negative note. The Nifty 50 futures contract opened with a wide 153-point gap-down at 10,582 and tumbled to an intraday low of 10,512.5. Though the contract has bounced back from the day's low, the broader sentiment remains negative. Fresh sellers are likely to emerge at higher levels and cap the upside.

Key resistance is in the 10,600-10,620 zone. Though a test of this resistance zone is likely, a break above it is less probable. A pull-back from the 10,600-10,620 resistance zone can drag the index futures lower to 10,545 and 10,500 levels again. A further break below 10,500 can take the index futures lower to 10,475 and 10,450 thereafter.

Traders can go short on rallies at 10,585 and 10,600. Stop-loss can be placed at 10,625 for the target of 10,520. Revise the stop-loss lower to 10,570 as soon as the contract moves down to 10,555.

The downside pressure will ease only if the index futures breaks above 10,620 decisively. Such a break can then take the contract higher to 10,645 and 10,670 levels.

Strategy: Go short on rallies at 10,585 and 10,600 with a stop-loss at 10,625

Supports: 10,545, 10,500

Resistances: 10,620, 10,645

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