Technical Analysis

Nifty 50 July Futures (15,830)

Akhil Nallamuthu | Updated on July 05, 2021

The market breadth of the Nifty 50 is showing a bullish as the advance-decline ratio stands at 40-10.

 

BL Research Bureau

The domestic benchmark indices – the Nifty 50 and the Sensex – opened on the strong foot as it opened higher compared to last week’s close. Currently at 15,815 and at 52,805, the Nifty and the Sensex are up by about 0.6 per cent each for the day so far. This is despite the Asian markets sending out mixed signals. Early riser, the ASX 200 is flat, the Nikkei 225 is down by 0.6 per cent whereas the Hang Seng is down by nearly 0.5 per cent.

The market breadth of the Nifty 50 is showing a bullish as the advance-decline ratio stands at 40-10. The volatility is up as shown by India VIX – the volatility index – which is up by a little over 2 per cent to 12.34. Following the benchmarks, the mid- and small-cap indices are in the green, up between 0.4 and 1.2 per cent. Also, all the sectoral indices have gained, indicating a broad-based buying today. The Nifty Realty and the Nifty Financial services index are the top gainers, up by 1.9 and 0.7 per cent, respectively.

Futures

Like the underlying Nifty 50 index, the futures contract (July expiry) opened with a gap-up at 15,757 and has rallied to 15,830 levels; it made an intraday high of 15,856 before softening to the current levels. The contract has strongly bounced off the level at 15,750 and the factors like the market breadth and the intraday price action hints that the rally is likely to continue for the rest of the day. Therefore, traders can be bullish and initiate fresh long positions on intraday dips; stop-loss can be maintained at 15,770.

From the current level of 15,830, the futures will most likely rise to 15,875 – its nearest resistance. A breakout of this level will lift the contract to 15,910 with subsequent resistance at 15,945. The immediate support from 15,830 can be seen at 15,800 with the next one at 15,770. Notably, a break below 15,770 can turn the trend bearish.

Strategy: Buy on dips with stop-loss at 15,770

Supports: 15,800 and 15,770

Resistances: 15,875 and 15,910

Published on July 05, 2021

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