The Nifty call: Nifty 50 August Futures (17,290)

Akhil Nallamuthu |BL Research Bureau | | Updated on: Aug 02, 2022
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File image | Photo Credit: Andrey Bukreev

Go short below 17,240 and place stop-loss at 17,310

Equity markets across Asia seem to be facing selling pressure today. Major indices like Nikkei 225, ASX 200, Hang Seng and KOSPI have depreciated in the range of 0.2–2.8 per cent. Following this, the Indian benchmark indices opened today’s session with a gap-down. The Nifty 50 at 17,250 and the Sensex at 57,870 are down by 0.4 per cent each.

The market breadth of the Nifty 50 shows a bearish bias as the advance-decline ratio is at 17:33. Also, most of the sectoral indices are in the red and the volatility index has risen — that is, India VIX is up by 3.6 per cent. Therefore, the market is likely to stay weak for the rest of the day.

Futures: Like the underlying Nifty 50, the August futures of the index opened today’s session lower at 17,336 versus yesterday’s close of 17,378. While it declined to mark an intraday low of 17,241, the contract has recovered to the current level of 17,290. Note that the price level of 17,300 is a hurdle and, so, a rally beyond this is less likely.

Similarly, 17,240 can be a good intraday support. Therefore, for intraday positions, we would suggest waiting for now and considering shorting Nifty futures when the contract decisively falls below 17,240.

That is, go short below 17,240 and place stop-loss at 17,310. The contract could touch 17,100 before the end of the day. So, exit the shorts at 17,100.

Strategy: Go short below 17,240 and place stop-loss at 17,310. Exit the shorts at 17,100

Supports: 17,240 and 17,100

Resistances: 17,300 and 17,400

Published on August 02, 2022
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