Technical Analysis

Nifty call: Tread with caution in volatile session

Yoganand D | Updated on February 27, 2019 Published on February 27, 2019

Nifty 50 February futures (10,783)

Following a positive start amid mixed global cues, the domestic benchmark indices -- the Sensex and the Nifty --- slipped into the red on Indo-Pak tensions. The Sensex has fallen 0.3 per cent, while the Nifty has dropped 0.45 per cent.

The market breadth of the Nifty index is biased towards declines. The Nifty February futures contract began the session with a gap-up open at 10,855. After a rally to an intra-day high of 10,942, the contract started to decline due to profit-taking at higher levels.

The contract has slipped into negative territory and has marked an intra-day low at 10,746. It has bounced up from this level due to short-covering and trades at the key support level of 10,800.

The volatility index, India VIX, has surged over 11 per cent to 19.09 levels. With high volatility on the cards, traders should tread with caution in today's session.

Key supports below 10,800 are at 10,750 and then at 10,725. A strong fall below 10,725 can drag the contract down to 10,700 or 10,680 levels. On the upside, significant resistances are placed at 10,850. A rally above this level can take the contract higher to 10,875 and 10,900 levels again.

Strategy: The contract is volatile. Tread with caution.

Supports: 10,750 and 10,725

Resistances: 10,850 and 10,875

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