Technical Analysis

Nifty Call: Initiate fresh long position on rally above 11,350

Yoganand D, BL Research Bureau | Updated on May 09, 2019 Published on May 09, 2019

Nifty 50 May Futures (11,325)

The domestic benchmark indices, the Sensex and the Nifty, started the session in negative, taking bearish cues from the Asian markets. The Nikkei 225 declined 200 points or 0.9 per cent to 21,402 and Hang Seng Index tumbled 639 points or 2.2 per cent in today's session.

After an initial rally, the Sensex and the Nifty resumed their decline. However, recording the intra-day low, the benchmark indices are once again on a recovery mode. The key resistances are limiting the rally. The market breadth of the Nifty index is slightly biased towards declines. The India VIX, a volatility index has slumped 3.5 per cent to 25.44 indicating possibility of a recovery.

The Nifty May month contract began the session with a gap-down open at 11,378. Following an initial rally the contract marked an intra-day high at 11,397 and resumed the downtrend. The contract has recorded an intra-day low at 11,317 levels. It breached a key support at 11,350 and continues to trend downwards.

Next key support is at 11,300. An upward reversal from this support and a strong rally above 11,350 can start a  corrective rally to 11,375 and 11,400 levels. Traders can consider taking long positions on a strong rally above 11,350 with a fixed stop-loss.

A further break above 11,400 can push the contract higher to 11,425 and 11,450 levels. Next key resistances are at 11,480 and 11,500 levels. On the other hand, a decisive fall below 11,300 can drag the contract down to 11,270 and 11,250 levels. A conclusive fall below 11,250 can drag the contract down to 11,230 and 11,200.

Strategy: Fresh long positions are recommended on a strong rally above 11,350 levels

Supports: 11,300 and 11,270

Resistances: 11,350 and 11,375

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