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BL Research Bureau
Nifty 50 August Futures (11,472)
The Indian benchmark indices began the day higher on the back of the positive sentiment which was largely down to considerable gain posted by the US indices. Interestingly, the S&P 500 index registered a fresh lifetime high yesterday. However, the Nifty 50 and the Sensex spot indices were unable to sustain at higher levels and gave up the intraday gains and are now trading near yesterday’s close.
Notably, the major Asian indices are looking mixed. While the Nikkei 225 index ended the session with 1.3 per cent gain, the Hang Seng index and the Shanghai composite index has lost about a quarter per cent each so far.
Looking at the market breadth of the Nifty 50 index, the advance-decline ratio stands at 20-30, indicating a bearish bias. But despite the benchmarks being flat, the mid-cap and the small-cap indices have gained between 0.2 per cent and 0.5 per cent till now.
Among the sectoral indices, the Nifty PSU bank index is the top gainer, up by 1.1 per cent followed by the Nifty private bank index, up by 0.8 per cent. This suggests that the banking stocks are the favourites in today’s trade. Consequently, the Nifty Bank index has gained by 0.8 per cent. At the other end, the Nifty realty index and the Nifty metal index are the top losers, down by 1.6 per cent and 0.8 per cent, respectively. There is no change in the fear gauge, i.e. India VIX – the volatility index – which stays at yesterday’s close of 19.2 levels.
The August futures of the Nifty 50 index began the session higher at 11,513 against Monday’s close of 11,474. Though it briefly traded above the crucial level of 11,500, it started to decline gradually and is now hovering around 11,470. The price should sustain above 11,500 for the bulls to gain ground further. So, long positions are not recommended until the resistance of 11,500 is breached decisively, even though the overall direction is up. Given the scenario, initiate fresh long positions if the contract breaks out of 11,500. In such a case, a stop-loss can be at 11,450.
Strategy: Initiate fresh longs above 11,500
Supports: 11,455 and 11,400
Resistances: 11,530 and 11,580
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