The Nifty 50 began today’s session on the front foot by opening with a gap-up at 23,630, against yesterday’s close of 23,558. But soon after opening, the index faced selling pressure, leading to a sharp decline. It is now hovering around 23,450, down 0.4 per cent.
The advances/ declines ratio of the Nifty 50 currently stands at 6/44. All mid- and small-cap indices are in the red and volatility has shot up. India VIX – the volatility index – has gone up by a little over 6 per cent to 13.8. In addition, most of the sectoral indices are in the red. These factors indicate broad-based selling.
Nifty Realty, which has lost 3.2 per cent so far today, is the top loser. On the other hand, Nifty Private Bank, down 0.5 per cent, is the top performer.
Nifty 50 futures
The June futures of the Nifty 50 opened higher at 23,611 versus yesterday’s close of 23,568. However, it has been facing considerable downward pressure since morning, and the contract is now trading around 23,450, down 0.5 per cent.
Nifty futures has slipped below the key 23,500-mark. Also, the intra-day chart so far shows good downward momentum. So, the decline is likely to extend from the current level.
While 23,400 is the nearest support, given the momentum, we expect the contract to fall below this level and touch 23,300 or even 23,200.
For Nifty futures to shed the bearish bias and turn positive, it should reclaim 23,500 and sustain above that level.
Trading strategy
Sell Nifty futures now at 23,450 and add shorts if the price rises to 23,550. Place the initial stop-loss at 23,620. When the contract touches 23,400, tighten the stop-loss to 23,500. Book profits at 23,300.
Supports: 23,300 and 23,200
Resistance: 23,500 and 23,620