Nifty Call: Contract is range-bound, tread with caution

Nifty 50 November Futures (12,710)

The Sensex and Nifty 50 commenced today’s session on a negative note and continues to hover in the red. Asian markets are mixed today-- the Nikkei 225 has climbed 0.7 per cent to 25,520, while Hang Seng index has slipped 0.4 per cent to 26,120 levels. The domestic benchmark indices have slipped about 0.4 per cent. Market breadth of the Nifty 50 index is marginally biased towards declines. The India VIX has slumped 4 per cent to 21.15 levels. Although the large cap indices are witnessing selling interest, the mid and small-cap indices are experiencing buying interest. The Nifty mid and small-cap indices have climbed 0.5 per cent and 1.2 per cent respectively. The sectoral indices are mixed today; the selling pressure is seen across banking and financial sectors. Buying interest is witnessed in the Nifty Pharma and Realty indices that have climbed 1.5 per cent and 1 per cent correspondingly.

Following a gap-down open at 12,710 the Nifty 50 futures contract of November month moved higher to register an intraday high at 12,748 levels. But the contract began to decline on the back of profit booking and slipped below 12,700 levels. The contract is range-bound between 12,670 and 12,720. A strong rally above 12,720 can witness a corrective rally and take the contract higher to 12,745 and then to 12,760. A strong break above this barrier is needed to bring back bullish momentum and take the contract higher to 12,780 or 12,800 levels. On the other hand, a fall below 12,670 can pull the contract down to 12,640 and then to 12,600. Traders with a near-term view should tread with caution.

Strategy: The contract is range-bound, tread with caution.

Supports: 12,670 and 12,640

Resistances: 12,720 and 12,740

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