Nifty 50, the Indian benchmark index, opened today’s session with a gap-up at 24,190 versus yesterday’s close of 24,056. The index advanced after opening and is now hovering around 24,340, up 1.2 per cent.
The advance/decline ratio of Nifty 50 stands at 48/2. All mid- and small-cap indices are in the green and in addition, all the sectoral indices too have gained today so far. This is an indication of a broad-based buying.
Among the sectors, Nifty Realty and Nifty IT, up 2.8 and 2.2 per cent respectively, are the top gainers.
The Asian equity market, after witnessing bloodbath yesterday, has seen a recovery today. Particularly, Nikkei 225 (34,200) has gained 10 per cent and KOSPI (2,530) is up nearly 4 per cent.
Nifty 50 futures
The August futures of Nifty 50 began today’s session higher at 24,230 compared to yesterday’s close of 24,103. It is now trading around 24,320, up nearly 1 per cent.
Although the indications are positive, Nifty futures is facing a resistance at 24,370. Until this level holds, the bias will be bearish. If this level is breached, the contract can rally to 24,600.
On the other hand, if Nifty futures resumes the decline on the back of the barrier at 24,370, it can find support at 24,150 and 23,950. A breach of the support at 23,950 can lead to another round of sell-off.
Trading Strategy
Since there is a resistance ahead and that recent trend has been bearish, traders can short Nifty futures now at 24,320 with a stop-loss at 24,400. When the contract falls to 24,100, revise the stop-loss to 24,200. Book profits at 24,000.
Supports: 24,150 and 23,950
Resistance: 24,370 and 24,600