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BL Research Bureau
Nifty 50 July Futures (15,780)
Equity markets across Asia are in the green since morning, and taking the positive cues, the Indian benchmarks opened in the green and are staying positive so far. The Nifty 50 and the Sensex have gained 0.5 per cent each and are at 15,795 and 52,710, respectively. Among the Asian majors, ASX 200, the early riser, gained 0.5 per cent; the Nikkei 225 and the Hang Seng indices are up by 0.7 and 3.2 per cent, respectively.
The market breadth of the Nifty 50 is positive as the advance-decline ratio is at 30-20, and the mid- and small-cap indices are up, indicating a broad-based buying. The volatility has slumped as indicated by India VIX – the volatility index, which is down by about 5 per cent to 13. Among the sectoral indices, apart from the Nifty Pharma, FMCG and Auto, all others have appreciated. While Pharma and FMCG indices are down by about 0.8 and 0.3 per cent, respectively, the Nifty Auto is flat. The Nifty Metal is the top gainer, up by 3.6 per cent, followed by the Nifty IT index, up by 1.2 per cent.
Futures: Like the underlying Nifty 50 index, the July futures began the session with a gap-up at 15,741 versus the previous close of 15,709. After the positive open, the contract continued to gain and is now trading around 15,780 i.e., up by 0.5 per cent from Wednesday’s close. The intraday high is 15,798, and importantly, 15,800 is an important level. Also, the 21-day moving average coincides with this price point. So, the bulls face a challenge now; however, bulls are at an advantage and are likely to go beyond this, especially considering that the buying is broad-based. But from a trading perspective, 15,800 is a hurdle, so traders can go long once the contract gets past this level. Being expiry day, there is a likelihood of the futures staying flat and close below 15,800.
If the futures rallied above 15,800, it could rise to 15,870 and then possibly touch 15,900. On the other hand, if sellers gain a grip on the back of the resistance at 15,800, the contract could slip to 15,740 and then to 15,700.
Strategy : Initiate long above 15,800; stop-loss at 15,740
Supports : 15,740 and 15,700
Resistances : 15,800 and 15,870
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