Technical Analysis

Nifty call: Go short on reversal from 10,950, with stop-loss at 10,980

Gurumurthy K | Updated on January 22, 2019 Published on January 22, 2019

Nifty 50 January Futures (10,928) The Nifty 50 futures contract has failed to retain the momentum gained on Monday. The contract opened with a slight 20-point gap-down at 10,950 and fell to a low of 10,917. It is continuing to hover around the day’s low.

The inability to breach the 10,950-10,965 resistance zone can keep the contract under pressure. As long as the contract trades below 10,950, there is a strong likelihood of it breaking below 10,900. Such a break can take the index futures initially lower to 10,880. A further break below 10,880 will increase the likelihood of the fall extending towards 10,860 and 10,845.

The bearish outlook will get negated if the index futures manages to breach 10,965 decisively. Such a break will see the contract revisiting 11,000 levels. A strong break and a decisive close above 11,000 can then target 11,100.

Traders can go short if the contract reverses lower from 10,950. Stop-loss can be placed at 10,980 for the target of 10,885. Revise the stop-loss lower to 10,935 as soon as the contract moves down to 10,920.

Strategy: Go short on a reversal from 10,950, with a stop-loss at 10,980

Supports: 10,900, 10,880

Resistances: 10,965, 11,000

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