BL Research Bureau

Nifty 50 June Futures (9,710)

Equity markets across Asia are under pressure, and as a result, the Indian market is feeling the heat. The benchmark indices of India, i.e. the Nifty spot and the Sensex spot indices, which opened with a gap-down have been heading south since the session open.

The Nikkei index posted a loss of 3.5 per cent whereas other Asian indices like the Hang Seng index and the Shanghai composite index are down by 2.3 per cent and 0.9 per cent, respectively. Thus, the overall market sentiment looks negativem which reduces the chance of intraday recovery.

The market breadth of the Nifty 50 index is indicating a bearish bias as 44 out of the 50 stocks in the index are in the red. Interestingly, the small-cap index is trading marginally higher even as the mid-cap index, following the benchmark indices, is down. Sector-wise, the Nifty media index is the only gainer today, up by a per cent. The top loser is the Nifty PVT bank index, down by 4.4 per cent. Consequently, the Nifty bank index is down by about 4.3 per cent. This is followed by the Nifty financial services index, which has lost about 3.6 per cent so far. As bears dominate, the fear gauge, i.e. the volatility index has shot up today. India VIX is up by nearly 10 per cent to 33.7 levels.

The June futures contract of Nifty index, which opened lower today, has been on a decline since morning. It opened at 9,875 versus last week’s close of 9,955. While it made an intraday high of 9,904, the contract started to fall and is now trading around 9,700. Since the broad market sentiment is negative today, the contract is likely to extend the downtrend for the rest of the day. So, traders can initiate fresh short positions on rallies with stop-loss at 9,780.

Strategy: Sell on rallies with stop-loss at 9,780

Supports: 9,700 and 9,650

Resistances: 9,780 and 9,800

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