The Indian benchmark indices began today’s session with a gap up following positive cues from the Asian markets. The Nifty 50 at 16,540 and the Sensex at 55,450 are up by 1.2 per cent each. Among the major Asian indices, Nikkei 225, ASX 200, Hang Seng and KOSPI are up ranging from 0.7 – 2.7 per cent.

The market breadth of the Nifty 50 is positive with advance/decline ratio at 44/6. The Midcap 50 and the Smallcap 50 are up by 0.8 and 1.6 per cent, respectively and all the sectoral indices are in the green. These factors substantiate the bullishness.

Futures: Like the underlying Nifty 50, the July futures of the index opened gap-up today at 16,521 versus yesterday’s close of 16,347. The contract moved up post opening to mark an intraday high of 16,569 and is currently trading around 16,550.

Since the overall sentiment looks bullish with the Nifty futures trading above 16,500, the likelihood of rally from here looks high. It might rally to the nearest resistance at 16,700 and then at 16,750. On the downside, 16,500 can offer good support.

Traders can go long at current level of 16,550 and add more longs if the price falls to 16,500. Place initial stop-loss at 16,400. When the contract surpasses 16,600, tighten the stop-loss to 16,480. Exit the longs at 16,700.

Strategy: Go long at current level of 16,550 and add more longs if price falls to 16,500. Place initial stop-loss at 16,400. When the contract surpasses 16,600, tighten the stop-loss to 16,480. Exit the longs at 16,700.

Supports: 16,500 and 16,400

Resistances: 16,700 and 16,750

Related Topics
comment COMMENT NOW