Nifty Call: Go long if rallies above 11,130

Nifty 50 August Futures (11,089)

Taking bearish cues from the Asian markets, the Sensex and the Nifty started the session on a negative note. The Nikkei 225 has declined 0.8 per cent to 21,521 and Hang Seng index has slumped 1.3 per cent to 27,777 levels in today's session.

After initial decline, the Sensex and the Nifty began to recover from the intra-day low but have failed to sustain the recovery. The market breadth of the Nifty index is in break-even.

The India VIX has advanced 2.8 per cent to 14 levels. The Nifty Media index has declined 3 per cent due to selling interest. Buying is seen in the Nifty Auto which has gained over 1 per cent.

The Nifty August month contract started the session with a gap-down opening at 11,058. After marking an intra-day low at 11,031 the contract began to recover. However, the contract started to experience selling pressure at higher levels, recording an intra-day high at 11,120. Key resistance is in the band between 11,120 and 11,130.

A strong rally above 11,130 can witness a corrective rally to 11,150 and 11,175 levels. Next key resistances are at 11,200 and 11,225 levels. On the other hand, key supports at 11,050 and 11,030 could provide base for the contract. A decisive fall below 11,030 can drag the contract down to 11,000 and then to 10,970 levels.

Traders should tread with caution and consider taking long positions above 11,130 with a fixed stop-loss.

Strategy: Go long only if the contract rallies above 11,130 with a tight stop-loss

Supports: 11,050 and 11,030

Resistances: 11,130 and 11,150

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