BL Research Bureau
Nifty 50 August Futures (11,600)
The Indian benchmark indices, i.e. the Nifty 50 and the Sensex are in the green today so far despite the Asian markets looking weak. But notably, the US markets rallied yesterday, and S&P 500 index hit an all-time high.
After opening with a gap-up, both the domestic benchmarks are now trading higher by about half a per cent each. But the Nikkei 225 index and the Hang Seng index, two among the major equity indices in Asia, are down by 0.4 per cent and 0.8 per cent, respectively.
The positive bias in the Nifty 50 is supported by the advance-decline ratio which currently stands at 31-19, meaning 31 out of the 50 stocks in the index are up today. Also, the mid-cap and the small-cap indices are inclined to an uptrend as they have extended the recent bull run in today’s session as well. These indices have gained between 0.5 per cent and 1.3 per cent till now.
Moreover, all sectoral indices except the Nifty FMCG index, have gained today denoting a broader bullish sentiment. The top performers are the Nifty realty index, up by a significant 7.1 per cent and the Nifty PSU bank index, up by 2 per cent. As the market is at ease, there is a marginal drop in volatility, i.e. India VIX – the volatility index – has come down by 0.6 per cent to 19.18.
The August futures of the Nifty 50 index witnessed a gap-up open today, i.e. at 11,590 versus Wednesday’s close of 11,548. The contract then rallied to mark an intraday high of 11,608 and is now hovering around 11,600. The overall trend is bullish, and the contract broke out of an important level of 11,500 yesterday, strengthening the case for further appreciation. But looking at the intraday price movement today, 11,600 seems to be blocking the bulls acting as a hurdle. Considering that, traders can initiate fresh long positions if the contract rallies past 11,600. Stop-loss can be at 11,540.
Strategy : Buy the contract if it decisively breaches 11,600
Supports: 11,540 and 11,500
Resistances : 11,650 and 11,700