Nifty call: Go long above 10,200 with stop-loss at 10,150

BL Research Bureau

Nifty 50 June Futures (10,175)

Buoyed by the positive sentiment across the Asian market, the Indian benchmark indices have been rallying since the beginning of the session. While the Nifty 50 spot index is up by 0.9 per cent, the Sensex spot index is up by 1.1 per cent so far.

The Nikkei index has gained half a per cent today whereas the Hang Seng and the Shanghai composite indices are up by over one per cent each.

The market breadth of the Nifty 50 index is signalling a bullish bias as 38 out of the 50 stocks in the index have gained so far. Also, the mid-cap and the small-cap indices are in the green. Consequently, all the sectoral indices are up today except the Nifty IT index (down by 0.4 per cent). The Nifty Realty index is the top gainer, up by 4.1 per cent followed by the Nifty PSU bank index, up by 2.2 per cent. As the market is broadly bullish, the fear gauge, i.e. the volatility index has slumped. India VIX has dropped by a little over 2 per cent to 30.75 levels.

The June futures contract of the Nifty 50 index opened marginally lower at 10,057 compared to Thursday’s close of 10,071. However, after some sluggishness during the initial hour, the contract began to rally and is now approaching 10,200 levels. The intraday price action suggests a good buildup of upward momentum, and so the contract is likely to extend the rally. But 10,200 could act as a hindrance. Thus, traders can initiate fresh long positions if the contract rallies past 10,200. Stop-loss can be at 10,150.

Strategy: Go long above 10,200 with stop-loss at 10,150

Supports: 10,150 and 10,100

Resistances: 10,200 and 10,260