Nifty 50 July Futures (10,565)

Yoganand D BL Research Bureau | Updated on July 14, 2020

Taking cue from the weak Asian markets, the Sensex and the Nifty 50 commenced the session with a gap-down open and continued to trend downwards. The Nikkei 225 index has fallen 0.87 per cent to 22,587 and Hang Seng index has declined 1.3 per cent to 25,443 in today’s session. The Sensex and the Nifty 50 continued to trend southwards, and have slumped 2 per cent each. The market breadth of the Nifty 50 index is biased towards declines. On the other hand, India VIX, the volatility index, has jumped 7.5 per cent to 27.1 levels. The Nifty mid- and small-cap indices have plunged 2.2 per cent and 2.4 per cent respectively. Apart from the Nifty Pharma index, which is hovering marginally in the positive territory, other sectoral indices are hovering in the negative territory. The top sectoral losers are Nifty PVT Bank and Nifty PSU Bank indices that have tumbled 4 per cent and 3.9 per cent respectively.

The Nifty 50 July month contract started the session with a gap-down open at 10,752. After marking an intra-day high at 10,763, the contract continued to trend downwards and has tumbled 2.3 per cent. The contract has breached a key support at 10,600, recording an intra-day low of 10,553. The near-term outlook has turned bearish for the Nifty index. Traders can make use of intra-day rallies to initiate fresh short positions with fixed stop-loss at 10,650. The contract can test support at 10,550; a decline below this base can test supports at 10,525 and 10,500. Subsequent supports are at 10,470 and 10,450. On the upside, key resistances are at 10,600 and 10,650. A strong rally above 10,700 can result in a corrective rally to 10,730 and then to 10,750.

Strategy: Sell on rallies with fixed stop-loss at 10,650

Supports: 10,550 and 10,525

Resistances: 10,600 and 10,650

Published on July 14, 2020

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