Nifty call: Go long with stop-loss at 16,275

Nifty 50 July Futures (16,316)

The Nifty 50 and the Sensex after gap down opening have recovered and are trading in green for the day. The Nifty 50 at 16,325 and the Sensex at 54,680 are up by nearly 0.3 per cent for the day. The Indian indices have recovered despite the major Asian stock indices are in the red today. Barring Nikkei 225 (up by 0.7 per cent), all other indices i.e., ASX 200, Hang Seng and KOSPI are down in the range of 0.2 – 1 per cent.

The market breadth of the Nifty 50 is showing a bullish bias as the advance/decline ratio stands at 30/20. Supporting the bullish bias, all the mid- and small-cap indices are in the green and most of the sectoral indices have gained as well. The Nifty PSU bank index, up by 1.4 per cent, is the top gainer.

Futures: The July futures of the Nifty 50, which began the session with a gap-down at 16,200 versus yesterday’s close of 16,300, recouped its losses and is now trading around 16,316. Having recovered above the resistance level of 16,300, it is likely to gain further. The nearest resistance is at 16,500. Yet, a rally beyond this level today is unlikely.

Traders can go long at the current level of 16,316 and add more longs if price dips to 16,250. Place the stop-loss at 16,200. When the contract moves above 16,400, tighten the stop-loss to 16,275. Exit the longs at 16,500.

Strategy: Go long at the current level of 16,316 and add more longs if the price dips to 16,250. Place stop-loss at 16,200. When the contract moves above 16,400, tighten the stop-loss to 16,275. Exit the longs at 16,500.

Supports: 16,250 and 16,200

Resistances: 16,500 and 16,600

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