Nifty 50 August futures (11,432)

The Sensex and the Nifty bounced back strongly in today's session on the back of buying interest after the slump in the last session due to global cues and a sharp fall in the rupee.

Both the indices started the session with a gap-up open and continue to trade in positive territory. The market breadth of the Nifty index is biased towards advances. The volatility index, India VIX, has declined 1.88 per cent to 13.14 levels.

All the sectoral indices feature in positive territory, led by the Nifty IT index, which has surged 1.2 per cent. The Nifty August month futures contract also began the session with a gap-up open at 11,394 levels. After marking an intra-day low at 11,390 levels, the contract bounced back, breaching a key resistance at 11,400 and it continues to move upwards.

The near-term outlook will remain bullish as long as the contract trades above 11,400 levels. Traders with a short-term view can make use of dips to buy the contract, while maintaining a fixed stop-loss at 11,395 levels. A strong rally beyond the immediate resistance at 11,435 can take the contract higher to 11,450 and 11,475 levels. On the other hand, a conclusive fall below the key support level of 11,400 can bring back selling pressure and drag the contract down to 11,380 and 11,350 levels.

Strategy: Buy on dips with stop-loss at 11,395

Supports: 11,400 and 11,380

Resistances: 11,435 and 11,450