Technical Analysis

Nifty 50 July Futures (15,835): July 8, 2021

Akhil Nallamuthu | Updated on July 08, 2021

Short the contract for intraday with stop-loss at 15,890

BL Research Bureau

Driven by the negative bias fed by the major Asian equity indices, the domestic benchmark indices – the Nifty 50 and the Sensex – are down by 0.3 and 0.25 per cent, respectively. The Nifty 50 is at 15,834 whereas the Sensex is at 52,930. Among the Asian indices, the Nikkei 225 is down by 0.65 per cent whereas the Hang Seng has lost about 2.2 per cent so far.

The market breadth of the Nifty 50 index is indicating a bearish bias as the advance-decline ratio currently stands at 23-27. However, unlike the benchmarks, the mid- and small-cap indices are in the green, posting a gain between 0.3 and 0.85 per cent. But there is an increase in volatility as the Nifty is down. India VIX – the volatility index – is up by nearly 3 per cent to 12.55. Among the sectoral indices, the Nifty Media and Realty indices are the top gainers, up by 0.75 and 0.60 per cent, respectively. The Nifty Auto and FMCG indices are the top losers, down by 0.55 per cent each.

Futures: The July series Nifty 50 futures opened today’s session lower at 15,852 versus yesterday’s close of 15,886. Although it rallied initially to mark an intraday high of 15,889, the contract quickly turned negative and is now trading around 15,835, which is about 0.35 per cent lower compared to yesterday’s close. It is now hovering at an important level of 15,840 and the price action indicates that the likelihood of a decline from here is high.

Therefore, traders can short the contract for intraday with stop-loss at 15,890. The nearest support is at 15,800; if this level is breached, the contract can fall to 15,750. On the other hand, if the contract recovers from the current level, it will face hurdle at 15,890 and 15,900. A breakout of this can turn the intraday trend positive wherein the futures can rally to 15,950.

Published on July 08, 2021

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