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Nifty 50 November futures (11,891)
Wall Street witnessed a strong rally on Election Day (Tuesday). The Dow Jones Industrial Average jumped 550 points or 2.1 per cent to close at 27,480, extending the rally from Monday’s positive session. The S&P 500, a broad-based index, climbed 58 points or 1.78 per cent to close at 3,369, and the Nasdaq composite Index advanced 202 points or 1.85 per cent to finish at 11,160 levels in the past session. With the US Presidential election going neck and neck between Donald Trump and Joe Biden, a clear winner would cheer the US markets as well as the global markets.
Dow Jones view
The Dow Jones Industrial Average index faces a key hurdle at 28,000 and the 21-day moving average is also poised at around this level. A decisive break above this resistance can push the index higher to 28,360 and then to 28,560 in the ensuing trading sessions. But, failure to move beyond this barrier will drag the index down to 27,140 and then to 26,800. Key supports below 26,800 are placed at 26,500 and 26,140.
Tracking the positive US markets, the Nikkei 225 index has climbed 1.7 per cent to 23,695, while the Hang Seng index has rallied marginally by 0.3 per cent to 25,000 in today's session. Both the Sensex and the Nifty 50 began the session with a gap-up open after taking cues from the positive global markets, and continued to trend upwards. The domestic benchmark indices have advanced 0.75 per cent so far. The market breadth of the Nifty 50 is biased towards advances. On the other hand, the India VIX has slumped 5 per cent to 23.02. The Nifty mid and small-cap indices have climbed 0.6 per cent and 0.3 per cent, respectively.
The top sectoral gainer is the Nifty Pharma and IT index, boosted by a weak rupee, that has slipped below the 74-mark. While the IT index has gained 2.4 per cent, the pharma index has rallied 2.6 per cent. The Nifty Bank and Realty indices have seen selling interest and have slumped 0.9 per cent and 1.2 per cent, respectively.
The Nifty 50 November month contract started the session on a flat note, opening at 11,823 levels. After an initial rally, the contract recorded an intra-day high at 11,919 and declined to mark an intra-day low at 11,771. But the contract bounced up from this low and trades above a key support level of 11,850. Traders can make use of intra-day dips to buy the contract, with a stop-loss at 11,840 levels. A decisive break above 11,920 can take the contract higher to 11,940 and 11,960 levels. Key supports below 11,850 are placed at 11,825 and 11,850. The next crucial base is at 11,770.
Strategy: Buy on intra-day dips with a stop-loss at 11,840.
Supports: 11,850 and 11,825
Resistances: 11,920 and 11,940
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