Nifty 50 August Futures (16,240)
The Nifty 50 and the Sensex opened today’s session with a considerable gap-up despite the Asian markets sending out mixed signals. However, both the domestic benchmarks gave away all the gains and are now in fact trading lower by 0.3 per cent each compared to yesterday’s closing level – the Nifty is at 16,230 and the Sensex is at 54,370. Among the major Asian indices, the Nikkei 225 gained 0.6 per cent whereas the Hang Seng is down by 0.1 per cent.
The market breadth of the Nifty 50 is indicating a bearish bias as the advance-decline ratio is at 17-33 and like the benchmarks, all the mid- and small-cap indices are in the red. Also, the volatility has gone up as shown by India VIX – the volatility index. It is up by about 2 per cent to 12.95. Among the sectoral indices, the Nifty Metal is the top gainer, up by 2.1 per cent followed by the Nifty Oil & Gas, up by 0.4 per cent. Notably, all other indices are in the red and the top loser being the Nifty Pharma, down by 1.7 per cent followed by the Nifty Consumer durables, down by 1.6 per cent.
So, traders can risk going long at current levels with stop-loss at 16,180. On the upside, the contract is likely to face resistance at 16,270 and 16,320. But if it breaks below 16,200, the sell-off can intensify, possibly dragging the contract to 16,150 and 16,100.
Strategy: Buy with stop-loss at 16,180
Supports: 16,200 and 16,150
Resistances: 16,270 and 16,320