Technical Analysis

Nifty call: Sell on rallies, with fixed stop-loss at 11,730 levels

| Updated on April 08, 2019 Published on April 08, 2019

Nifty 50 April futures (11,709)

Following mixed cues from the global markets, the Sensex and the Nifty started the session on a marginally positive note, but subsequently declined.

The Nikkei 225 has declined 0.2 per cent to 21,761, while the Hang Seng index has advanced 0.23 to 30,004. Both the Sensex and the Nifty have slipped into the red and continue to hover in negative territory.

The market breadth of the Nifty index is biased towards declines. The India VIX has jumped 9.7 per cent to 20.19 levels. The broader index, Nifty 500, is also witnessing selling pressure and has dropped 0.3 per cent to 9.657 levels.

The Nifty April month contract started the session on a flat note, opening at 11,760 levels. After marking an intra-day high at 11,780, the contract began to decline, experiencing selling pressure at higher levels. The contract declined below a key support at 11,725 and recorded an intra-day low at 11,683 levels. As long as the contract trades below the key support at 11,725, the near-term outlook will remain bearish.

Traders with a short-term view can make use of intra-day rallies to sell the contract, with a stop-loss at 11,730 levels. The contract can test support at 11,675. A strong fall below this base level can drag the contract down to 11,650 and then to 11,630 levels.

On the other hand, the key resistances are at 11,750 and 11,780 levels. Only a decisive rally above 11,750 will alter the bearish stance and take the contract higher to 11,780 and 11,800 levels.

Strategy: Sell the contract on intra-day rallies, with a fixed stop-loss at 11,730 levels.

Supports: 11,680 and 11,650

Resistances: 11,725 and 11,750

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