Technical Analysis

Supports are at 16,150 and 16,000 and resistances 16,295 and 16,350

Nifty 50 May Futures (16,233)

The Indian benchmark indices are under pressure. The Sensex and Nifty 50 have seen a wide gap-down open for the second consecutive trading day. Both the indices are down about 1.2 per cent each. Nifty is at 16,225 and Sensex is trading at 54,190. Nifty has declined below the key support level of 16,275 and Sensex has broken below 54,400. A further fall below 16,200 on the Nifty and 54,000 on the Sensex can trigger a steeper fall towards 16,000 and 53,000, respectively.

In Asia, barring the Shanghai Composite (3,003, up 0.06 per cent) other major indices are trading sharply lower. Hang Seng (20,001) down 3.8 per cent has been beaten down the most. This is followed by Nikkei 225 (26,382, down 2.3 per cent) and Kospi (2,608) down 1.35 per cent.

In the US, the Dow Jones Industrial Average (32,899) was down 0.3 per cent on Friday. It has important support at 32,500. A break below it can take it down to 32,000 this week.

Futures: The Nifty 50 May (16,233) Futures contract down 1.13 per cent. The resistances are at 16,295 and 16,350. The view is bearish. A fall to 16,150 is possible and a break below it can take the contract down to 16,000 and even lower in the coming sessions.

Traders can go short now and accumulate on a rise at 16,285. Keep the stop-loss at 16,320. Trail the stop-loss down to 16,220 as soon as the contract falls to 16,160. Move the stop-loss further down to 16,180 as soon as the contract falls to 16,140.  Book profits at 16,120.

A strong rise past 16,350 will necessarily needed to turn the near-term outlook positive. But that looks unlikely.

Trading Strategy: Go short now, and on a rise at 16,285. Keep the stop-loss at 16,320 for the target of 16,120. Trail the stop-loss down to 16,220 as soon as the contract falls to 16,160. Move the stop-loss further down to 16,180 as soon as the contract falls to 16,140.  

Supports: 16,150 and 16,000

Resistances: 16,295 and 16,350

Published on May 09, 2022