Nifty Call: Buy in declines with stop-loss at 10,900

Nifty 50 August Futures (10,952)

After a gap-up opening, the Sensex and the Nifty witnessed a sharp fall in the initial hour of today's session. But, subsequently, both the benchmark indices began to trend up amid bearish cues from weak Asian markets. The Nikkei 225 has slumped 2 per cent to 20,261 and Hang Seng index has declined 2.9 per cent to 25,419 in today's trading session. The Sensex and the Nifty have recovered the initial loss and have gained over 1.3 per cent each. The market breadth of the Nifty index is biased towards advances. The India VIX is hovering flat at 17.35 levels. Nifty mid and small-cap indices have surged 0.9 per cent and 1.5 per cent respectively. The Nifty Bank index has climbed almost 2 per cent backed by strong gains in the Nifty PSU bank index which is up 2.5 per cent.

The Nifty August month contract commenced the session with a gap-up opening at 10,948. After an initial decline, the contract recorded an intra-day low at 10,745 and bounced back strongly. It breached the key resistance at 10,900 and marked an intra-day high at 10,989 levels. The near-term outlook will stay positive as long as the contract trades above 10,900 levels. Traders can buy in declines with a fixed stop-loss at 10,900. A strong rally above 10,990 can take the contract higher to 11,025 and 11,050 levels. Key supports below 10,900 are placed at 10,870 and 10,840 levels.

Strategy: Buy in declines with a stop-loss at 10,900-levels

Supports: 10,900 and 10,870

Resistances: 10,990 and 11,025

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