Technical Analysis

The Nifty call: Nifty 50 July Futures (15,715)

Akhil Nallamuthu BL Research Bureau | Updated on July 01, 2021

A man looks at a screen displaying news of markets update inside the Bombay Stock Exchange (BSE) building in Mumbai (file photo)   -  REUTERS

Nikkei 225 is down by 0.3 per cent and the Hang Seng is down by 0.5 per cent

Although the major equity indices across Asia are in the red, the Indian benchmark indices opened with a gap-up. However, it soon gave up the gains and are now about 0.2 per cent lower compared to yesterday’s closing price. Among the Asian majors, the Nikkei 225 is down by 0.3 per cent and the Hang Seng is down by 0.5 per cent.

The market breadth of Nifty 50 shows a bearish bias as 31 out of the 50 stocks in the index have lost so far. Although the volatility remains at about the level at which it ended yesterday i.e., India VIX – the volatility index – is largely unchanged at 13.17.

Also read: Sensex, Nifty trade flat note amid weak global cues

Interestingly, while the mid-cap indices are down, small-cap indices have gained about 0.5 per cent. Among the sectoral indices, the Nifty Auto index is the top performer, up by nearly 1 per cent followed by the Nifty Media index, up by 0.5 per cent. On the other hand, the Nifty IT index is the biggest loser so far today followed by the Nifty Financial services index, down by 0.25 per cent.

Futures: Following the underlying Nifty 50 index, the futures contract (July expiry) opened marginally higher at 15,765 against yesterday’s close of 15,752. It rallied following this and marked an intraday high of 15,775. However, the contract overturned the trend and started falling. After making an intraday low of 15,696, it recovered a bit and is now hovering at 15,715.

Also read: Sensex, Nifty to see flat opening amidst mixed global cues

Notably, 15,700 is an important support. So, despite the bias being negative and the Asian markets indicating the same, traders can wait for the contract to decisively breach 15,700 before going short on the futures. That is, sell the contract below 15,700 with stop-loss at 15,760. Below 15,700, the contract can decline to 15,650 and then possibly to 15,600.

Alternatively, the intraday trend can turn bullish if the contract climbs above 15,760. In that case, it can rise to 15,800. The price band of 15,800 and 15,815 is a strong resistance.

  • Strategy: Go short below 15,700; stop-loss at 15,760
  • Supports: 15,700 and 15,650
  • Resistances: 15,760 and 15,800
Published on July 01, 2021

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