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Nifty 50 August Futures (15,900)
Equity markets across Asia are positive and all the major indices are in the green. Indices like the Nikkei 225 and the Hang Seng have gained 1.8 and 1.1 per cent, respectively. Encouraged by this trend, the Indian benchmark indices too opened positively. The Nifty 50 and the Sensex have gained about 0.7 each as they are at 15,875 and 52,930 currently.
The market breadth is also showing bullish signs i.e., the advance-decline ratio of the Nifty 50 is at 41-9, which is a strong bullish sign. Besides, all the mid- and small-cap indices as well have gained 0.9 and 1.2 per cent. Likewise, all the sectoral indices, barring the Nifty Media (down by nearly 0.1 per cent), all others are positive. The pack is led by the Nifty Realty, up by 4.4 per cent followed by the Nifty PSU bank index, up by 1 per cent.
But notably, the volatility, though not much, seems to be higher which is not synonymous to uptrend. That is, India VIX – the volatility index – is up by 1.5 per cent to 13.
Futures: Since the underlying Nifty 50 index opened with a gap-up, the futures (August expiry) too opened in a similar fashion – it began the session at 15,885 as against Friday’s close of 15,777. Post opening, the contract has been inching up and is hovering at the key level of 15,900.
Given that the market is witnessing a broader buying and that the Asian markets are bullish, the futures will most likely extend the gain beyond 15,900 and could reach 15,930 – the nearest resistance. A breach of this level can lift the contract to the psychological level of 16,000. Hence, for intraday, traders can go long with stop-loss at 15,825.
On the other hand, if bears gain advantage over the bulls on the back of the 15,900 and drag the contract, it can possibly touch 15,870 – a support level. Subsequent support can be spotted at 15,825.
Strategy: Buy the contract with stop-loss at 15,825
Supports: 15,870 and 15,825
Resistances: 15,930 and 16,000
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