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BL Research Bureau
Nifty 50 September Futures (11,630)
Following Friday’s strong rally, the Nifty 50 index opened with a huge gap up in today’s session and continued to head north. The index is currently trading up by 3.4 per cent. Similarly, the Sensex too began the day with a gap up and continued to rise.
Market breadth is favouring the bulls as the Advance-Decline ratio is at 35-15. India VIX – the volatility index is at 16.7 levels, up by 9 per cent. All the sectoral indices are in the green except Nifty IT index and Nifty Pharma index, which are down by 2.8 and 1.6 per cent respectively. Top gainer is Nifty FMCG index which is up by 6 per cent followed by Nifty Private bank index and Nifty Fin service index, both gaining a little over 5 per cent.
The September expiry futures contract on Monday opened with a huge gap up at 11,499 against the previous close of 11,295. The contract softened initially to 11,441, but started to move up and registered an intraday high at 11,644.
But currently the futures price is at a discount compared to the spot price, and this might be an indication of profit booking. Hence, the contract might face considerable correction.
So, traders should tread with caution and buy in dips with stop loss below 11,590.
Strategy: Buy in dips with stop loss below 11,590
Supports: 11,590 and 11,562
Resistances: 11,700 and 11,740
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