Nifty call: Go long above 15,870 with stop-loss at 15,840

BL Research Bureau

Nifty 50 July Futures (15,855)

Equity markets across Asia look mixed as the Nikkei 225 ended flat, the ASX 200 posted a gain of 0.2 per cent, and the Hang Seng is down by 0.4 per cent. Nevertheless, the Indian market opened on a bullish note – the Nifty 50 and the Sensex opened with a gap-up and are trading at a gain of about half a per cent each.

The market breadth of the Nifty 50 index is indicating a bullish bias as the advance-decline ratio is at 36-14 and like the benchmark indices, all the mid- and small-cap indices are in the green. Among the sectoral indices, the Nifty PSU bank index is the biggest gainer, up by 0.8 per cent followed by the Nifty Metal index, up by nearly 0.7 per cent. The Nifty Realty is the biggest loser, down by 0.5 per cent followed by the Nifty FMCG index, down by 0.15 per cent.

Futures: Following the underlying Nifty 50 index, the futures contract (July expiry) opened with a gap-up at 15,816 against yesterday’s close of 15,785. It rallied following this and marked an intraday high of 15,876. But it softened from that level as 15,870 is a considerable hurdle and is currently hovering around 15,855. Yet, the price action remains bullish and so, traders can consider initiating fresh long positions. Since 15,870 can hinder the rally, one can go long if the contract breaks out of 15,870 with stop-loss at 15,840.

Above 15,870, the immediate resistance is at 15,900. But the contract can be expected to rally past this level and touch 15,930. On the other hand, if the contract slips below 15,840, the intraday trend can turn bearish, wherein the futures could decline to the support band of 15,815 and 15,800. Subsequent support is at 15,770.

Strategy: Go long above 15,870; stop-loss at 15,840

Supports: 15,840 and 15,815

Resistances: 15,870 and 15,900

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