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BL Research Bureau
The Asian markets are mixed and among the major equity indices, the Nikkei 225 is up by 0.16 per cent whereas the Hang Seng is down by 0.25 per cent so far. However, the Indian benchmark indices, though opened with a minor gap-down, recovered and are in the green. At around 15,890, the Nifty 50 is up by 0.35 per cent and at 53,052, the Sensex is up by 0.32 per cent for the day.
At 30-20, the advance-decline ratio is showing a positive inclination for the day and all the mid- and small-cap indices are in the green. Among the sectoral indices, the Nifty Media and the Nifty Bank are the top performers today, up by 2.2 and 1.2 per cent, respectively. The Nifty IT and Pharma are the top losers, down by 0.5 and 0.3 per cent, respectively.
Futures: Like the underlying Nifty 50 index, the futures contract (July expiry) opened with a gap-down at 15,829 as against yesterday’s close of 15,858. However, it swiftly recovered and rallied to mark an intraday high of 15,930. Unable to extend the rally beyond that level, the contract started to moderate and is now trading around 15,900 – an important support from intraday trend perspective. That is, the trend can be bullish until the contract stays above this level whereas a breakdown of this support can turn the intraday trend negative.
The daily chart of the July futures show that the contract has fell considerably from the region of 15,930 and 15,950 twice in the past one month. Therefore, even though there are bullish signs, the contract can struggle to break out of above-mentioned price range and the risk-reward is favouring sell trades at current levels. Given that, traders can risk shorting the contract with stop-loss at 15,950 if it slips below the support of 15,900. Below this level, the price is likely to drop to 15,840 and possibly to 15,800. On the other hand, a breakout of 15,950 can lift the contract to 16,000, where the upward momentum could slow down.
Strategy: Initiate shorts below 15,900 with stop-loss at 15,950
Supports: 15,900 and 15,840
Resistances: 15,950 and 16,000
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