Nifty 50 began today’s session at 24,335 versus Wednesday’s close of 24,144. But the index has moderated to 24,230, up nearly 0.3 per cent so far today.
The advance/decline ratio of Nifty 50 stands at 34/16, giving the index a bullish bias. Also, mid- and small-cap indices have appreciated well and most of the sectors are in the green.
Barring Nifty Pharma, down 0.25 per cent, all other sectoral indices have advanced further. Nifty IT and Nifty Realty, up 1.7 per cent each, are the top gainers.
The Asian equity market is positive today, supporting the bullish inclination. Among the majors, Nikkei 225 (37,800), ASX 200 (7,950), Hang Seng (17,400) and KOSPI (2,690) have risen between 1 and 3 per cent.
Nifty 50 futures
The August futures of Nifty 50 began today’s session higher at 24,322 compared to Wednesday’s close of 24,175. It is now trading around 24,250, up 0.3 per cent so far today.
Today’s price action so far shows that the rally was rejected at 24,400. This level is a strong resistance. Just above this is another barrier at 24,500. So, for Nifty futures to establish a sustainable rally, it should break out of 24,500.
At the same time, the contract is now hovering around the support of 24,250. Below this, there is a trendline support at 24,170. The chart shows that the price band of 24,125-24,170 is a demand zone.
If the fall since today’s opening extends to 24,170, it will provide a good risk-reward ratio rather than at the current level. So, traders can wait and take longs if Nifty futures decline a bit more from the current market price.
Trading strategy
Buy Nifty futures if it declines to 24,170. Place a stop-loss at 24,080. Book profits at 24,400.
Supports: 24,170 and 24,125
Resistance: 24,400 and 24,500