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BL Research Bureau
Nifty 50 May Futures (14,600)
Major indices across Asia are trading with a bearish bias, and following this, the Indian benchmark indices opened with a considerable gap-down today. Although the Nifty 50 and the Sensex have recouped some if the losses, both are still down by 0.5 and 0.7 per cent for the day. Among Asian majors, the Hang Seng is down by nearly 1.5 per cent, whereas the KOSPI lost 0.7 per cent.
Even as the Nifty 50 is down, the market breadth show a good fight between the bulls and the bears as the advance-decline ratio is at 27-23 i.e., 27 stocks have advanced today so far. But the volatility has gone up slightly. India VIX – the volatility index – is up by 1.2 per cent to 23.32. The mid- and small cap shows mixed trend as the Midcap 50 is down by about 1.2 per cent whereas the Smallcap 50 is up by 0.4 per cent. Among the sectoral indices, the Nifty metal index is the top gainer, up by about 0.9 per cent followed by the Nifty pharma index, up by nearly 0.4 per cent. The Nifty bank and the Nifty media index are the top losers, down by 1.75 and 1.6 per cent, respectively.
Futures: Like the underlying Nifty 50 index, the May futures contract began the session significantly lower at 14,541 and then declined to mark an intraday low of 14,461 in the first hour of trade. But then the contract started to recover and is now hovering around 14,600, which can be a hindrance for the bulls. Above that level, 14,640 can be a resistance. So, even though the recovery looks encouraging for the bulls, a clear breakout of 14,640 is needed for considering fresh long positions. On the other hand, 14,560 is a good support and thus the next leg of trend can be confirmed only either 14,560 or 14,640 is breached.
Traders can now stay on the sidelines and go long if the recovery extends beyond the resistance at 14,640. Stop-loss can be maintained at 14,600. Above 14,640, the contract will most likely hit 14,700, above which it can rally to 14,750.
Strategy : Go long above 14,640 with stop-loss at 14,600
Supports : 14,560 and 14,500
Resistances : 14,640 and 14,700
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