Technical Analysis

Nifty 50 July Futures (10,785)

Akhil Nallamuthu, BL Research Bureau | Updated on July 09, 2020 Published on July 09, 2020

The Indian benchmarks opened the session on a positive note on bullish Asian cues. The Nifty 50 spot and the Sensex spot indices have been moving up since the beginning of the session and are now trading with gains of about 0.8 per cent and 1 per cent, respectively.

The Nikkei 225 index closed today with a gain of 0.4 per cent. While the Hang Seng index is trading marginally higher, the Shanghai composite index is up 1.3 per cent.

The market breadth of the Nifty 50 index is hinting at a positive bias as 33 out of the 50 stocks in the index are up today. Like the benchmark indices, the mid- and small-cap indices are up as well. Among the sectoral indices, the Nifty metal index is the top gainer, up 2.1 per cent followed by the Nifty financial services index, up 1.6 per cent. The Nifty FMCG index is the sole loser today, down 0.3 per cent. As the market sentiment is positive at the broader level, volatility has seen a slump. India VIX – the volatility index – has dropped by 3 per cent to 25.35 levels.

The July futures contract of the Nifty 50 index began today’s session with a gap-up at 10,725 from Wednesday’s close of 10,696. It then moderated slightly to mark an intraday low of 10,712 from where it began to rally. Looking at the intraday price action, after briefly trading in the range of 10,750 to 10,775, the contract has now broken out of the interim resistance at 10,775 and is likely to extend the gains further. Hence, traders can initiate fresh long positions with stop-loss at 10,725.

Strategy: Buy the contract with stop-loss at 10,725

Supports: 10,750 and 10,700

Resistances: 10,825 and 10,850

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Published on July 09, 2020
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