F&O Setup: Nifty aims to sustain its first ‘higher high’ after seven sessions

The Nifty began the truncated trading week on a positive note on Monday, ending with gains of over 200 points. Short-covering was seen in the futures of both Nifty and the Nifty Bank.Another positive that has taken place on the charts is that the Nifty made a “higher high” for the first time in seven trading sessions. A “higher high” means the intraday high of one session was higher than the previous day’s high.

This was the first “higher high” made by the index after the July 31 high of 24,956.

Date	Nifty Intraday High
July 31	24,956
August 1	24,784
August 4	24,736
August 5	24,733
August 6	24,671
August 7	24,634
August 8	24,585
August 11	24,600

There was some short-covering seen on the FII desk, yet, their net short positions on index futures remain at 91.5%, having added 160 longs contracts, and having trimmed 2,783 contracts on Monday.
Net short contracts for FIIs stand at 1.79 lakh contracts on Tuesday, from 1.82 lakh on Monday.The rebound seen during Monday’s trade has taken the Put-Call Ratio on the Nifty back above levels of 1, now at 1.03, from oversold levels of 0.66 at the start of Monday’s trading session.

For the Nifty, support remains near the recent swing low around the 24,350 mark, as its lows over the last three sessions have hovered around that levels.

24,750 is the next hurdle that the Nifty will have to cross for further upside. In case the Nifty does cross the 24,750 mark, the next level that comes into play is the 20-Day Moving Average of 24,847.

The Nifty Bank will also hold the key for any further upmove on the Nifty, with its 20 and 50-Day Moving Averages of 56,213 and 56,400 respectively, being the key levels to watch.

A sector to keep on your radar today will be the Metal stocks, after US President Donald Trump signed an executive order to extend the tariff pause on China by another 90 days.