Nifty 50 October futures (11,560)

After declining during early session, the Nifty made a quick recovery and is currently trading in positive territory. Yesterday, the index broke below the lower limit of the broader range, but it bounced back, thereby, making the break down a false one. The Sensex has followed a similar trend.

In today’s session both the Nifty and the Sensex are marginally positive, with a gain of 0.3 per cent. The Nikkei and Hang Seng, too, are marginally positive for the day.

Stocks in the Nifty 50 index are equally split among gainers and losers as the advances-declines ratio is at 25-25. India VIX, the volatility index, is at 16.15 levels, higher by 1.8 per cent compared to its previous close. The Nifty realty index is the weakest sectoral index today, as it is down by 1.6 per cent, whereas the Nifty financial services index is the top performer, as it has gained 1.2 per cent for the day.

The October expiry futures contract is oscillating between key levels at 11,485 and 11,727. The next leg of the major trend will occur only if either of these levels is broken. So, from the trading perspective, only short-term trades are advised. As the contract has tested and bounced off the lower limit of the range in the previous session, it will most probably head towards the higher limit. Hence, traders with a short-term perspective can maintain a buy in the dips strategy, with stop loss at 11,480, i.e., below the lower limit of the range.

Strategy: Buy on dips with stop-loss at 11,480

Supports: 11,510 and 11,485

Resistances: 11,630 and 11,686

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