The Nifty call: Nifty 50 November Futures (13,020)

BL Research Bureau

Positive close in the US market yesterday has set the tone for the Asian markets today. Major equity indices across Asia are trading in the green. While the Nikkei 225 has gained about 2.5 per cent, the Hang Seng is up by 0.3 per cent and the ASX 200 has closed with a gain of 1.3 per cent.

Following this, the Indian equity benchmark indices are up, and the Nifty 50 and the Sensex are up by 0.7 per cent each so far.

The market breadth of the Nifty 50 index is positively inclined as the advance-decline ratio stands at 31-19. Volatility seems to have gone up despite the market trading with a bullish bias i.e. the volatility index – India VIX – has gone up by over 5 per cent to 21.92.

Like the benchmark indices, all the mid-cap and small-cap indices are up and have gained between 0.6 per cent and 1 per cent. Similarly, all the sectoral indices have gained led by the Nifty auto index, up by 1.8 per cent. This is followed by the Nifty bank index, up by 1.7 per cent. Since all the indices are up, the bull trend seems to be broad based and that means the market is highly likely to stay in the green for the rest of the day.

The November futures of the Nifty 50 index opened the session with a gap-up at 12,977 versus yesterday’s close of 12,934. The contract then rallied and registered an intraday high of 13,040 and has moderated to the current level of 13,020, thereby breaking out of the sideways range of 12,750 and 12,950. Thus, it has also crossed over the 13,000-mark and seems to be sustaining over it.

The above factors indicate considerable bullish momentum, and the contract can extend the rally further. So, traders can go long in declines with stop-loss at 12,960. On the upside, the contract can face resistance at 13,100. Subsequent resistance is at 13,200. Support below 13,000 are at 12,960 and 12,925.

Strategy: Go long in the contract with stop-loss at 12,960

Supports: 12,960 and 12,925

Resistances: 13,100 and 13,200