Technical Analysis

Nifty call: Go long above 11,300 with stop-loss at 11,260

Akhil Nallamuthu | Updated on July 30, 2020 Published on July 30, 2020

BL Research Bureau

Nifty 50 July Futures (11,280)

The weak cues from the Asian markets were not enough to stop the Indian benchmarks from opening higher for the day. Post that, the Nifty 50 spot and the Sensex spot indices went up and as of now, both are slightly trading off their intraday peaks. Among the major Asian indices, the Nikkei 225 ended the day with a quarter per cent loss; the Hang Seng and the Shanghai Composite are trading lower by about 0.5 per cent and 0.2 per cent, respectively.

The market breadth of the Nifty 50 index is indicating that the stocks in the green are higher, i.e. the advance-decline ratio now stands at 31-19. Following the footsteps of the benchmark, the mid-cap and the small-cap indices have gained so far. Among the sectoral indices, apart from the Nifty Metal index (down by 0.3 per cent) and the Nifty media index (down by one per cent), all other indices have gone up. The top performers are the Nifty pharma index and the Nifty IT index up by 3 per cent and 1.6 per cent, respectively. The market seems to witness lower volatility today in comparison to yesterday as the volatility index – India VIX – has fallen by 2 per cent to 23.6 levels.

The July futures contract of the Nifty 50 index opened with a gain at 11,253 as against yesterday’s close of 11,222. It then inched up and registered an intraday high of 11,290 from where it softened a bit and is now trading around 11,280. Visibly, the contract lacks a trend as it has been oscillating in a very narrow range between 11,270 and 11,290 for the past couple of hours. Though the market breadth and other indices hint at a bullish bias, the contract has been consolidating, indicating a loss in momentum. Moreover, it faces resistance at 11,300. So, for intraday, traders can go long if the contract crosses over 11,300. Stop-loss can be at 11,260.

Strategy: Go long above 11,300; stop-loss at 11,260

Supports: 11,250 and 11,220

Resistances: 11,300 and 11,325

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Published on July 30, 2020
futures and options
technical analysis
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