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Nifty 50 June Futures (15,670)
The benchmark indices – the Nifty 50 and the Sensex – opened the session with a gap-up today taking positive cues from the Asian market. Currently, Nifty 50 is at 15,690 and Sensex 52,680, up by 0.9 and 0.8 per cent, respectively.
Major Asian indices namely Nikkei 225, ASX 200, Hang Seng and KOSPI are up in the range of 0.8 – 2.5 per cent.
The market breadth of the Nifty 50 index gives a bullish bias as the advance/decline ratio stands at 41/9. All mid- and small-cap indices are in the green where most of them are up by over 1 per cent. Barring the Nifty IT (down by 0.7 per cent), all the sectoral indices are in the green. The Nifty Media, up by 2.3 per cent is the top gainer followed by the Nifty Auto, up by 1.3 per cent.
However, the indices are at a critical resistance level and the overall bearish bias, which has been in place over the past few months, has not changed. The short and medium-term outlook still remains weak.
Futures: Like the underlying Nifty 50, the June futures of the index opened today’s session higher at 15,650 compared to yesterday’s close of 15,573. It then rallied to hit an intraday high of 15,748 and moderated to the current level of 15,670.
Note that 15,750 is a strong resistance and the immediate next hurdle is at 15,800. Also, a falling trendline falls within this range, making the resistance stronger. Until 15,800 is decisively breached, the bias will be bearish, and suggest considering short positions on rallies.
At the current level of 15,670, traders can go short on Nifty futures. Add more shorts if the contract moves up to 15,750 and keep stop-loss at 15,850. When the contract falls below 15,600, tighten the stop-loss to 15,750. Revise it down further to 15,625 when it slips below 15,500. Exit the shorts at 15,350.
Strategy: Go short on Nifty futures now at 15,670. Add more shorts if the contract moves up to 15,750 and keep stop-loss at 15,850. When the contract falls below 15,600, tighten the stop-loss to 15,750. Revise it down further to 15,625 when it slips below 15,500. Exit the shorts at 15,350.
Supports: 15,500 and 15,350
Resistances: 15,750 and 15,800
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