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BL Research Bureau
Since morning, the major equity markets across Asia are showing sending out mixed signals – the Nikkei 225 is down by 0.3 per cent and the Hang Seng is down by 0.4 per cent whereas the ASX 200 and the KOSPI are up by 1.9 and 0.3 per cent, respectively. Following this, the Indian benchmark indices too saw positive opening of varied degree. While the Nifty 50 opened marginally positive, the Sensex opened with a considerable gap-up. The Nifty is at 17,660 and the Sensex is currently at 59,370.
The market breadth of the Nifty is showing a bearish bias as the advance-decline ratio is at 18-32. But volatility has dropped today as indicated by India VIX – the volatility index, which has come down by 2 per cent and the mid- and small-cap indices are in the green, gaining between 0.3 and 0.75 per cent.
Among the sectoral indices too, most of them are up today led by the Nifty PSU Bank index, up by 1.8 per cent followed by the Nifty Consumer durables index, up by 1.4 per cent. The Nifty Media, down by 0.9 per cent is the top loser followed by the Nifty IT index, down by 0.4 per cent.
Futures: The September futures of the Nifty 50 opened marginally lower at 17,697 versus yesterday’s close of 17,708. Although it attempted to rally, the resistance band of 17,740 and 17,780 is blocking the bulls and until this resistance holds, the contract can be expected to trade with a bearish bias. Nevertheless, it is currently approaching the support at 17,600 and so, traders can short Nifty futures below this level with stop-loss at 17,650.
A break below 17,600 will make the job easier for the bears to drag the contract down to the support at 17,530. Decisive breach of this level can result in the futures declining to 17,480.
Strategy: Sell below 17,600 with stop-loss at 17,650
Supports: 17,600 and 17,530
Resistances: 17,650 and 17,700
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