BL Research Bureau

Nifty 50 July Futures (10,380)

The Indian benchmarks, after opening marginally higher, has been rallying despite mixed cues from the Asian peers. The Nifty 50 spot and the Sensex spot indices are now trading with a gain of 1.1 per cent each.

Looking at the Asian indices, the Nikkei 225 index has posted a loss of three-fourth of a per cent today whereas the Shanghai composite index is up by 1.7 per cent.

The market breadth of Nifty 50 index shows that it has an upward bias as the advance-decline ratio now stands at 31-19.

Following the benchmark indices, the mid- and small-cap indices too have gone up. While the Mid-cap 50 index is up by 0.6 per cent, the Small-cap 50 index is up by nearly 0.8 per cent so far. As with the sectors, the Nifty PSU bank index is the top gainer, up by about 2.4 per cent and the Nifty Pharma index is the top loser, down by 1.1 per cent. Since the market is bullish biased, the volatility has dropped today. The volatility index – India VIX – has slumped by 3.5 per cent to 28.1 levels.

The July futures contract of the Nifty 50 index began today’s session slightly higher at 10,266 versus the previous closing level of 10,240. As the contract is currently trading around 10,380, it seems to have broken out of the range 10,150 – 10,350 within which it has been oscillating for the past one week. Since the contract has moved past the resistance of 10,350 and the market seems to be witnessing broad-based buying, the likelihood of the rally being extended looks high. Hence, traders can buy the contract on declines with stop-loss at 10,320.

Strategy : Buy the contract on declines with stop-loss at 10,320

Supports : 10,300 and 10,260

Resistances: 10,450 and 10,500

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