Nifty 50 seems to be struggling to get a strong follow-through rise above 23,000. The index opened with a gap-up at 23,038.95 but failed to sustain higher. It has come-off sharply after making an intraday high of 23,043.20. Nifty is currently trading almost flat at 22,953. The advances/declines ratio is at 21:29. This is inclined towards bearishness.
Nifty 50 outlook
The immediate outlook is slightly unclear. But broadly, the short-term outlook is bullish. Intraday support is in the 22,900-22,850 region. We expect this support zone to limit the downside.
Resistance is around 23,030. The chances are high for the Nifty to breach this hurdle. Such a break can take it up to 23,150-23,200 in the coming sessions.
In case the Nifty breaks below 22,850, it can fall to 22,800 – the next important support.
Global indices
Asian markets are all in green. Nikkei 225 (38,714.70), Kospi (2,700), Shanghai Composite (3,100) and Hang Seng (18,665) are all up in the range of 0.2 to 0.5 per cent.
The US markets are closed today on account of a public holiday.
Nifty 50 Futures
The Nifty 50 May Futures (23,004) is marginally down by 0.07 per cent. The contract is facing resistance in the 23,070-23,100 region. Support is around 22,950 which is likely to limit the downside.
We expect the Nifty 50 May Futures contract to sustain above 22,950 and breach 23,100. Such a break can take the contract up to 23,200.
The contract will come under pressure for a fall to 22,850-22,800 only I fit declines below 22,950.
Trade Strategy
Traders can wait for dips. Go long at 22,990 and 22,960. Keep the stop-loss at 22,930 initially. Trail the stop-loss up to 23,010 as soon as the contract moves up to 23,060. Move the stop-loss further up to 23,085 when the contract touches 23,110 on the upside. Exit the long positions at 23,140.
Supports: 22,950, 22,850
Resistances: 23,100, 23,200