BL Research Bureau

Nifty 50 August Futures (11,470)

Though the major Asian markets are sending out bearish signals, the Indian benchmark indices were able to remain at least flat so far. The Nifty 50 and the Sensex spot indices are now trading near yesterday’s closing level after witnessing a minor gap-up open. But a prolonged consolidation can spell danger for the bulls.

Among the Asian indices, the Nikkei 225 index has closed with a marginal loss of one-tenth of a per cent. While the Hang Seng index is down by 0.1 per cent, the Shanghai composite index has lost about 1.5 per cent today.

The advance-decline ratio of the Nifty 50 index at 29-21 shows that the index is positively biased. Interestingly, even as the benchmark indices are sluggish, the mid-cap and small-cap indices have gained between 0.6 per cent and 1 per cent so far today.

Among the sectoral indices, the Nifty media index and the Nifty auto index are the best performers, up by 2 per cent and 1.5 per cent, respectively. A couple of indices are in the red – the Nifty pharma index, down by 0.4 per cent and the Nifty FMCG index, down by 0.3 per cent. The volatility has gone up slightly, by 0.6 per cent to 19.45, as shown by the volatility index – India VIX.

After opening at 11,480 versus yesterday close of 11,471, the contract rallied a bit to mark an intraday high of 11,495. It was unable to break out of the resistance at 11,500, and then it moderated to the current market price of 11,470. While 11,500 is a substantial hindrance, the contract has good support at 11,455, and it has been oscillating between these two levels for the past few sessions.

So, until it breaches either 11,455 or 11,500, the next leg of the trend will remain uncertain. Traders can wait for the contract to move out of the above-mentioned price band to consider initiating new positions, as the direction of the break will indicate the next possible price swing. Above 11,500, the resistance levels are 11,530 and 11,580 whereas support levels below 11,455 are 11,425 and 11,400.

Strategy : Tread with caution as the contract is range bound

Supports: 11,425 and 11,400

Resistances: 11,530 and 11,580

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