Technical Analysis

Nifty call: Go short on rallies with fixed stop-loss at 10,810

Yoganand D Updated on January 03, 2019

Nifty 50 January Futures (10,765)

The Sensex and the Nifty began the session on a negative note. After an initial rally to positive territory, the benchmark indices slipped into the negative, witnessing selling interest at higher levels.

Both the benchmark indices are down about 0.55 per cent. There are no signs of an intra-day recovery.

The market breadth of the Nifty index is biased towards declines. The January month Nifty futures contract started the session on a flat note at 10,833. Following an intra-day rally, the contract recorded a high at 10,859 and subsequently started to decline on the back of selling pressure.

The contract breached a key support at 10,800 and registered an intra-day low at 10,742. As long as the contract trades below 10,800, the near-term outlook will remain bearish.

Traders can make use of intra-day rallies to go short, with a fixed stop-loss at 10,810 levels. If the downtrend continues, the contract can test supports at 10,750 and 10,730 levels. The next key support is at 10,700. Resistances are at 10,830 and 10,850 levels.

Strategy: Go short on rallies while maintaining a fixed stop-loss at 10,810 levels

Supports: 10,750 and 10,730

Resistances: 10,800 and 10,830

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