Wednesday, August 5, 2015

Nifty call: Go long on rally above 8,600 with stop-loss at 8,585

Nifty August Futures (8,598) The Nifty futures are in a near-term up-move. It took support from its 200-day moving average at 8,450 on Tuesday and bounced back smartly. Continuing the momentum, the contract started today's session on a positive note at 8,556 and extended its rally. However, a key resistance at 8,600 limited the contract's up-move. It marked an intra-day high at 8,609 and continues to test its resistance.

Traders should tread with caution at this juncture and consider initiating fresh long positions only on a decisive breakthrough of 8,600 with a stop-loss at 8,585 levels. The contract will continue its up-move to 8,626 and then to 8,650 levels in the near term. But a downward reversal from the current levels can pull the contract down to 8,575 and then to 8,550 levels. Only a strong fall below 8,550 will mar the near-term up-move and drag the contract down to 8,525 and 8,500 levels.

Strategy: Fresh long positions should be initiated only on a strong rally above 8,600 levels with a stop-loss at 8,585.

Supports: 8,575 and 8,550

Resistances: 8,625 and 8,650

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