Technical Analysis

Nifty call: Go short with stop-loss at 10,155

Yoganand D | Updated on March 28, 2018 Published on March 28, 2018

Nifty 50 March futures (10,137) The sharp fall in US equities, triggered by a sell-off in technology stocks in the last session, has unsettled investors. The Nasdaq Composite index tumbled almost 3 per cent, while the Dow Jones Industrial Average and the S&P 500 fell 1.4 per cent and 1.7 per cent respectively.

The Asian equity markets followed suit, opening the session in negative territory. They continued to trade in the red, with the Nikkei 225 down by 1.3 per cent and the Hang Seng index plunging 1.7 per cent.

The domestic bellwether indices, the Nifty and the Sensex, also started the session with a gap-down open and continued trading in the negative zone, underpinning the global markets. After opening at 10,135, the Nifty futures contract registered an intra-day low at 10,105. Taking support from this low, the contract began to recover, backed by short-covering, and marked an intra-day high at 10,158 levels. However, the recovery has failed to breach the key immediate resistance at 10,150 level.

The market breadth of the Nifty index is biased towards declines. Traders with a short-term view can go short, with a fixed stop-loss at 10,155 levels. The contract can decline to 10,125 and 10,100 levels. An emphatic breach of the key support at 10,100 can pull the contract down to 10,080 and 10,050 levels. Conversely, a strong rally above the next resistance level of 10,175 can bring back some bullish momentum and push the contract higher to 10,200. Subsequent resistances above this level are at 10,225 and 10,250 levels.

Strategy: Go short with a stop-loss at 10,155

Supports: 10,125 and 10,100

Resistances: 10,175 and 10,220

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