Technical Analysis

The Nifty call: Nifty 50 May Futures (16,140)

Akhil Nallamuthu |BL Research Bureau | Updated on: May 25, 2022

The Nifty of National Stock Exchange of India Ltd. (NSE) building in Mumbai o | Photo Credit: PAUL NORONHA

Stuck in the range of 16,100 - 16,220 since morning

The equity indices across Asia are in the green since morning and against this backdrop, the Indian benchmark indices, the Nifty 50 and the Sensex, began the session on a positive note. Among the Asian majors, ASX 200, Hang Seng and KOSPI are up in the range of 0.5 – 0.9 per cent. Nikkei 225 is trading flat.

Nevertheless, the Indian indices have pared some of the gains. As it stands, Nifty 50 at 16,150 and Sensex at 54,130 is up by 0.15 per cent each so far.

The advance/decline ratio of the Nifty 50 index is equally split at 25-25, not indicating any bias. But notably, all the mid- and small-cap indices have depreciated. Thus, large cap stocks seem to be the flavour for the day.

Among the sectoral indices, the Nifty Private bank is the top gainer, up by 1.2 per cent whereas the Nifty IT is the top loser, down by 2.6 per cent.

All the above information does not help up in zeroing in on the possible intraday trend for Nifty 50 as the above factors look mixed.

Futures: Like the underlying Nifty 50, the May futures of the index opened today’s session slightly higher at 16,168 versus yesterday’s close of 16,104. It rallied and registered an intraday high of 16,221 and has now moderated to the current level of 16,140.

From the perspective of intraday trading, one should wait for the contract to breach either 16,100 or 16,220. That is, the direction of the break of the range 16,100-16,220 can lend us strong clue on the intraday trend.

A breach of 16,220 can lift the contract to 16,300 and then possibly to 16,400. A rally beyond this level is highly unlikely as it is a strong barrier. Alternatively, if Nifty futures slip below 16,100, it can quickly drop to 16,000. Also, there are high chances for the price to drop to 15,740.

Therefore, participants are recommended to wait for the contract to move out of the range of 16,100 – 16,220 before executing fresh trades. Execute trades along the direction of the break.

Strategy: Stay out now and initiate trade along the direction of the break of the range 16,100 – 16,220.

Supports: 16,000 and 15,740

Resistances: 16,300 and 16,400

Published on May 25, 2022
  1. Comments will be moderated by The Hindu editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.

You May Also Like

Recommended for you