Technical Analysis

Supports are at 16,450 and 16,350; Resistances 16,700 and 16,800

Nifty 50 June Futures (16,500)

As the Asian markets are exhibiting a positive bias, the Indian benchmark indices opened with a gap-up. Nifty 50 at 16,500 and Sensex at 55,400 are now up by about 0.5 per cent each.

Among the major Asian indices, Nikkei 225, ASX 200 and Hang Seng are up in the range of 0.3-1.7 per cent. KOSPI is trading flat.

The market breadth of the Nifty 50 is indicating a bullish bias – the advance/decline ratio currently stands at 40-10. The mid- and small-cap indices too are positive.

Among the sectoral indices, the Nifty Realty is the top gainer, up by 2.3 per cent whereas the Nifty FMCG is the only loser, down by 0.9 per cent.

Overall, the bias seems to be positive in the domestic market. However, one should be cautious as the market is showing considerable amount of volatility as the RBI (Reserve Bank of India) has announced its decision to hike repo rate by 50 bps.

Futures: Like the underlying Nifty 50 index, the June futures opened today’s session higher at 16,471 compared to yesterday’s close of 16,429. Although it made a high of 16,485 immediately on opening , it then quickly declined to mark an intraday low of 16,310. However, the contract recovered and has surpassed the high made in early trade i.e., 16,485 and is currently trading around 16,510.

At the current levels, the contract is hovering around the bottom of the range of 16,450 – 16,700.

The price action hints at a rally during the day. But, given the higher volatility, keep the positions light today and plan entries in more than one legs to average the price.

At the current level of 16,510 go long and add more longs when the contract dips again to 16,450. Place stop-loss at 16,340. When the contract rallies past 16,600, tighten the stop-loss to 16,450. Exit the longs at 16,700 – the upper end of the range.

Strategy: Go long at the current level of 16,510 and add more longs when the contract dips to 16,450. Place stop-loss at 16,340. When the contract rallies past 16,600, tighten the stop-loss to 16,450. Exit the longs at 16,700

Supports: 16,450 and 16,350

Resistances: 16,700 and 16,800

Published on June 08, 2022