Comments
Nifty 50 February Futures (14,835)
After seeing a correction last week, the equity market across the globe seems to have resumed the next leg of uptrend. Extending the gain, the US benchmark indices S&P 500 index and Dow Jones closed last session by posting a gain of 1.4 per cent and 1.6 per cent, respectively. Taking cues, the Asian equity markets too are positive today.
Major Asian indices like the Nikkei 225 and the ASX index are up by nearly 1 per cent each. The only major Asian index that has seen a decline so far is the Hang Seng index, down by nearly 0.5 per cent.
Against this backdrop, the Indian benchmarks Nifty 50 and Sensex opened with a gap-up and has been rallying. Both the indices are up by 1 per cent each.
The market breadth of the Nifty 50 index is showing a bullish bias as the advance-decline ratio stands at 44-6. But the volatility seems to have gone up i.e., the volatility index – India VIX – is up by about 3 per cent 24.05.
Similar to the benchmarks, mid- and small-cap indices have gained between 1.4 and 1.7 per cent. Also, all the sectoral indices are in the green. The Nifty pharma is the top gainer, up by 3.7 per cent followed by Nifty private bank index, up by 1.7 per cent. These factors indicate that the buying has been broad-based and so, the rally is likely to sustain.
Following the positive open in the Nifty 50 spot index, the February futures contract of the same began the session with a gap-up open. That is, it opened at 14,770 versus compared to the previous close of 14,696. While it initially dropped to mark a low of 14,611, it swiftly bounced and made a fresh high of 14,860 before moderating slightly to the current level of 14,835. The major trend is clearly up and the nature of the bounce hints at strong buying at lower levels. Also, 14,800 will henceforth act as a considerable support.
Considering the above factors, traders can be bullish and buy the Nifty 50 futures on declines with a stop-loss at 14,770. The nearest resistance can be spotted at 14,900. A breach of this level can lift the contract to 14,950 and 15,000.
Strategy: Buy on dips with stop-loss at 14,770
Supports: 14,800 and 14,770
Resistances: 14,900 and 14,950
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.