Nifty call: Tread with caution as contract is range-bound

BL Research Bureau

Nifty 50 September Futures (17,350)

Despite the Asian markets showing a negative bias, the Indian benchmark indices i.e., the Nifty 50 and the Sensex opened slightly higher. However, it could not build a rally and are now trading flat for the day. Among the major Asian indices, the Nikkei 225 is the only gainer, up by about 0.9 per cent whereas other indices like ASX 200, Hang Seng and KOSPI are down by 0.25, 0.5 and 0.9 per cent, respectively.

Although the Nifty 50 is flat, the advance-decline is showing a bullish bias as it stands at 30-20. Notably, mid- and small-cap indices are outperforming the benchmark indices as they have gained between 0.3 and 0.9 per cent. Among the sectoral indices, the Nifty PSU and Private bank indices are the top gainers, up by 1.6 and 0.9 per cent. On the other hand, the Nifty IT is the top loser, down by 0.75 per cent followed by the Nifty Auto index, down by 0.35 per cent.

Futures: The September futures of the Nifty 50 index began the session higher at 17,397 versus yesterday’s closing price of 17,376. After marking an intraday high of 17,401, the contract has moderated to the current level of 17,350. The price action over the past few days show that the futures has been held within the price levels of 17,360 and 17,430 and unless either of these levels are breaches, next leg of trend cannot be confirmed. Hence, traders can wait for now and initiate fresh trades along the direction of the break.

A breakout of 17,430 can lift the contract to 17,500 above which 17,550 can act as a hurdle. Whereas a break below 17,360 can drag it to 17,300. Subsequent support is at 17,230.

Strategy: Tread with caution as the contract is range bound

Supports: 17,360 and 17,300

Resistances: 17,430 and 17,500

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