Nifty call: Stay on the fence for now

Akhil Nallamuthu |BL Research Bureau | Updated on: Aug 05, 2022

Stay on the fence for now, and initiate fresh trade along the directions of 17,250–17,500 range

Nifty 50 August Futures (17,450)

The equity markets are in the green today. The major Asian indices like Nikkei 225, ASX 200, Hang Seng and KOSPI are up in the range of 0.5 – 0.9 per cent. Following the peers, the Indian equity benchmarks opened today’s session with a gap-up. The Nifty 50 at 17,425 and the Sensex at 58,485 are up by about 0.3 per cent for the day so far.

The Nifty 50 market breadth indicates a bullish bias where the advance/decline ratio stands at 34/16. All the mid- and small-cap indices have gained and most of the sectoral indices are up as well. The Nifty PSU bank index is the top gainer, up by 0.7 per cent.

Futures: Like the underlying Nifty 50, the August futures of the index opened today’s session higher at 17,423 versus yesterday’s close of 17,388. It initially rallied to hit a high of 17,495 and then moderated to the current level of 17,450.

The recent price action indicates that the contract is now oscillating between 17,250–17,500. So, until it moves out of this range, the next leg of trend will remain uncertain.

A breakout of 17,500 can lift the contract to 17,600 and then possibly to 17,700. On the other hand, if the support at 17,250 is breached, it can see a decline to 17,100. If the downtrend extends, it can find support at 17,000.

Considering the above factors, traders can stay on the fence for now and initiate fresh trade along the direction of the break of the range of 17,250 – 17,500.

Strategy: Stay on the fence for now and initiate fresh trade along the direction of the break of the range of 17,250 – 17,500

Supports: 17,250 and 17,100

Resistances: 17,500 and 17,600

Published on August 05, 2022
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