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Nifty 50 (19,335) and Sensex (65,100) experienced a day of mixed fortunes, culminating in a flat close during Wednesday’s trading session. A notable feature was a substantial sell-off during the second half of the day, which countered the initial gains of over half a per cent that both indices enjoyed by noon yesterday. Today, as the first hour of trading concluded, Nifty 50 and Sensex appeared to maintain their flat trajectory.
Across Asian markets, there were no clear indications as major indices displayed a mixed picture. The Nikkei 225 recorded a noteworthy gain of nearly 1 per cent, reaching 32,660, while the ASX 200 remained flat at 7,300. Conversely, the Hang Seng and KOSPI indices each suffered a 0.4 per cent decline, trading at 18,400 and 2,550, respectively.
Interestingly, the domestic market saw small-cap indices in the green, with gains ranging from 0.2 to 0.5 per cent. Conversely, mid-cap indices mirrored the sentiment of the benchmark indices by maintaining a flat performance.
Among the sectors, Nifty IT emerged as the top gainer, surging by 0.8 percent so far today, while Nifty PSU Bank experienced a 0.4 per cent decline, making it the top loser of the day.
Nifty 50 futures
The August Nifty futures contract opened slightly higher today at 19,354 compared to the previous day’s close of 19,342. Currently, it hovers around 19,315, reflecting a 0.2 per cent decline. The price action suggests a bearish advantage, but there’s substantial support at the 19,300 level. Should this support be breached, the index may find a strong base at 19,220, making a further decline less likely today.
On the flip side, if Nifty futures bounce off the 19,300 support, a rally towards the 19,400 resistance level is possible, with a barrier at 19,450.
However, it’s essential to exercise caution today, as it’s the expiry day, which often brings above-normal volatility. Consequently, the likelihood of false breaks is higher, warranting a prudent approach.
Trading strategy
It might be wise to remain on the side-lines for now. Consider initiating fresh short positions only if Nifty futures dip below the 19,300 support, setting target and stop-loss levels at 19,230 and 19,350, respectively.
The risk-reward ratio doesn’t currently favour aggressive trading, so risk-averse traders may opt to abstain from trading today, especially given the potential for increased volatility.
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