Comments
The benchmark indices – the Nifty 50 and the Sensex – began today’s session marginally higher on the back of positive cues from the Asian market. Post opening, both the indices went up but gave up some of the gains. Nifty 50 at 16,320 and Sensex at 54,570, are trading up by 0.3 and 0.45 per cent, respectively.
The domestic indices could not able to hold on to gains tracking Asian peers. Among the Asian majors, ASX 200, Hang Seng and KOSPI have now slipped into the negative territory. Also, Nifty 50 and Sensex are currently hovering around key resistance level, meaning the upside could be limited from here.
The Nifty 50’s advance/decline ratio is positive and it stands at 36/14. Interestingly, most of the mid- and small-cap indices are trading in the green. Among the sectoral indices, the Nifty Auto is the top gainer, up by 2.3 per cent whereas the Nifty Metal is the top loser, tumbling over 7 per cent for the day so far.
Futures: Like the underlying Nifty 50, the May futures of the index opened slightly higher at 16,270 versus Friday’s close of 16,253. Although it rallied to mark an intraday high of 16,338, it is hovering around the important level of 16,300.
Over the past two weeks, the contract has been trading in the range of 15,740–16,400. Ideally, for technical confirmation of a direction, the contract should either breach 16,400 or 15,740.
The contract is currently trading near the range top and with bearish trend, , it is worth going short at the current levels. On the upside, 16,300 and 16,400 can be strong barriers and we expect the contract to reverse in this price region. It is likely to decline towards 16,000 and potentially to 15,740 in the upcoming sessions.
Traders can initiate fresh shorts at the current level of 16,300 and add more shorts when the price moves up to 16,400. Place initial stop-loss at 16,520. When the contract touches 16,000, book one-third of the shorts and tighten the stop-loss to 16,150. Liquidate the remaining positions at 15,800.
Strategy: Initiate fresh shorts at the current level of 16,300 and add more shorts when the price moves up to 16,400. Place initial stop-loss at 16,520. When the contract touches 16,000, book one-third of the shorts and tighten the stop-loss to 16,150. Liquidate the remaining positions at 15,800.
Supports: 16,000 and 15,740
Resistances: 16,300 and 16,400
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.