Taking positive cues from the Asian markets, the Sensex and the Nifty 50 began the session with a gap-up open. The Nikkei 225 has advanced 1.7 per cent 27,494 levels and Hang Seng index is also up by 1 per cent to 25,108 levels in today’s session.

Both the Sensex and the Nifty 50 witnessed a corrective decline after the gap-up open. But the benchmark indices have recovered following a minor slip into the negative territory. The Sensex and the Nifty have climbed 0.4 per cent and 0.3 per cent respectively. The market breadth of the Nifty 50 is at break even. Volatility index-India VIX has declined 2.3 per cent to 13.8 levels.

The Nifty mid and small-cap indices are experiencing selling pressure and have fallen 0.4 per cent and 1.6 per cent respectively. Among the sectoral indices, the Nifty IT has jumped 1.9 per cent followed by Nifty pharma which is up by 0.5 per cent. On the other hand, Nifty Realty and Auto are down by 0.76 per cent and 0.74 per cent correspondingly.

The Nifty August month contract began the session with a gap-up open at 16,560. It recorded an intraday high at 16,565 and declined to register an intraday low at 16,392 levels. However, the contract bounced up and made a good recovery from the intraday low. It is up by 0.25 per cent.

As long as the contract trades above the key support level of 16,450 the near term stance stays positive. Traders can buy in declines with a fixed stop-loss at 16,440 levels. A strong rally above the immediate resistance level of 16,505 can take the contract higher to 16,525 and then to 16,560 levels. Supports below 16,450 are placed at 16,420 and 16,400 levels.

Strategy: Make use of intraday dips to buy the contract with a fixed stop-loss at 16,440 levels

Supports: 16,450 and 16,420

Resistances: 16,505 and 16,525

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