Nifty 50, the Indian benchmark index, opened today’s session with a gap-up at 24,184 versus yesterday’s close of 24,139. But after opening, the index moderated and is now hovering near yesterday’s closing level.
The advance/decline ratio stands at 23/27, giving a slight bearish bias. Nevertheless, all mid- and small-cap indices are in the red. Also, among sectors, barring Nifty IT (up 1 per cent) all other indices are down so far today. Hence, there is a broader selling pressure on the market.
Nifty Media, down nearly 0.6 per cent, and Nifty FMCG, down 0.4 per cent, are the top losers today.
The Asian equity market looks mixed. ASX 200 (7,860) and KOSPI (2,635) have appreciated by nearly 0.5 per cent each whereas Hang Seng (17,100) has lost 0.5 per cent. Nikkei 225 (36,190) is flat for the day.
Nifty 50 futures
The August futures of Nifty 50 began today’s session higher at 24,200 compared to yesterday’s close of 24,161. It is now trading around 24,160, essentially flat after the first hour of trade.
The chart shows a bearish bias for the short-term after the contract breached a trendline support yesterday. However, Nifty futures has a support at 24,125. If this level is invalidated, it can see a quick fall to 24,000, a strong base. A breach of this can intensify the sell-off. Support below 24,000 is at 23,700.
On the other hand, if Nifty futures rally from here and surpass the nearest hurdle at 24,250, it can extend the upswing to 24,400 and then possibly to 24,500.
As it stands, Nifty futures is exhibiting a bearish bias and so, traders can consider short once the nearest support is broken.
Trading strategy
Short Nifty futures with a stop-loss at 24,180 if it slips below the support at 24,125. Book profit at 24,000.
Supports: 24,125 and 24,000
Resistance: 24,250 and 24,400