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Nifty 50 August Futures (10,953)
Taking bearish cues from the weak Asian markets, the Sensex and the Nifty started the session with a gap-down open. The Nikkei 225 has tumbled 2 per cent to 21,087 and Hang Seng Index has declined 2.2 per cent to 26,937 levels.
The key indices took support from the intra-day low and began to recover; both the Sensex and the Nifty have trimmed their initial loss. The market breadth of the Nifty index is biased towards declines.
The India VIX has gained almost 4 per cent to 15.13 levels. The Nifty Mid and Small-cap indices have fallen 0.5 per cent and 0.7 per cent in today's session. Buying interest is seen in Nifty Auto index which has gained 1 per cent while other sectoral indices are trading in negative territory.
After a gap-down open at 11,940 the Nifty August month contract extended the down-move and recorded an intra-day low at 11,886. But the contract recovered from this low on the back of short-covering and marked an intra-day high at 11,994. The contract continues to remain volatile amid recovery. Hence, traders should tread with caution and consider initiating fresh long positions on a strong rally above 11,000 levels with a fixed stop-loss. Next key resistances are at 11,025 and 11,050. A strong decline below 10,920 can drag the contract down to 10,900 and 10,880 levels.
Strategy: Tread with caution as long as the contract trades below 11,000 levels
Supports: 10,920 and 10,900
Resistances: 11,000 and 11,025
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