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Nifty 50 August Futures (10,792)
Following a gap-down open, the Sensex and the Nifty began to trim their initial losses and began the trend upwards.
The Asian markets are trading marginally in the positive territory, the Nikkei 225 is up by 0.4 per cent to 20,710 and Hang Seng index has advanced 0.5 per cent to 26,190. While the Sensex trades flat wavering between red and green, the Nifty has advanced slightly higher and currently hovers in the positive zone.
The market breadth of the Nifty is biased towards advances. On the other hand, the India VIX has declined over 1 per cent to 17.6 levels. Buying interest is seen in the Nifty metal and media sector while selling pressure is continued in the Nifty realty sectoral index.
After a gap-down open at 10,706 the Nifty August month contract fell to an intra-day low of 10,646 levels. Taking support from this base at around 10,650 the contract began to trend upward and has been in a corrective rally. It has recorded an intra-day high at 10,807. The contract tests a key resistance at 10,805. A strong rally above this level will strengthen the corrective rally and take the contract higher to 10,830 and 10,850 levels on the back of short-covering.
Traders can go long with a fixed stop-loss on a strong rally above 10,805 levels. Key supports below 10,750 are placed at 10,725 and 10,700.
Strategy: Buy above 10,805 levels with a fixed stop-loss
Supports: 10,750 and 10,725
Resistances: 10,805 and 10,825
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