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BL Research Bureau
Nifty 50 May Futures (14,855)
The Asian equity indices are in the green, and against this backdrop, the Indian benchmark equity indices opened with a substantial gap-up today. It then advanced initially before giving up some of the gains. The Nifty 50 and the Sensex are trading higher by 0.6 each compared to yesterday’s close. Among the Asian indices, the Nikkei 225 is up by 0.2 per cent and the Hang Seng is up by nearly 0.5 per cent.
The market breadth of the Nifty 50 index indicates a bullish inclination as the advance-decline ratio stands at 36-13 i.e., 36 out of the 50 stocks in the index have gained so far. Moreover, the volatility has dropped by 3.5 per cent as indicated by India VIX – the volatility index.
The mid- and small-cap indices look mixed. While the mid-cap indices are trading slightly lower, the small-cap indices are up today. Among the sectoral indices, the Nifty Auto index (down by 0.1 per cent), all other indices are positive today. The Nifty Metal index is the top gainer, up by 2.4 per cent, followed by the Nifty Media index, up by 1.8 per cent.
Futures: Following the underlying Nifty 50 index, the futures contract (May expiry) opened with a gap-up at 14,835 against Thursday’s close of 14,769. After opening, the contract rallied and marked an intraday high of 14,908. However, it overturned the trend and is now below the support of 14,865. Nevertheless, so long as the contract stays above 14,800, a bearish reversal is less likely. So, one can use the intraday declines to go long in the contract. Stop-loss can be at 14,775.
The contract is likely to resume the rally from the current levels (14,855) and it could move past the resistance at 14,900. Above that level, it will most probably touch the crucial level of 15,000. The nearest support from the current levels is the price band of 14,780 and 14,800. Subsequent support is at 14,740.
Strategy: Go long on intraday dips with stop-loss at 14,775
Supports: 14,780 and 14,740
Resistances: 14,900 and 15,000
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