Nifty 50 September Futures (25,345)
Nifty 50 is trading lower after having seen a sharp rise on Thursday. The index saw a strong rise towards the end of the trading session on Thursday. The index opened higher today and touched a high of 25,430.50 in early trades. From there it has come down to the current level of 25,332, down 0.22 per cent. The advances/declines ratio is at 20:30. This leaves the bias slightly negative.
Nifty 50 outlook
The strong breakout above 25,200 has strengthened the bullish case. But considering the swift rise yesterday, there are good chances for the Nifty to take a pause and consolidate today before resuming the rally next week.
Resistance is around 25,430. Nifty has to surpass this hurdle to move further up towards 25,500 and higher. As long as the Nifty stays below 25,430 the chances of a corrective fall to 25,200 cannot be ruled out.
So, for now, we can expect the Nifty to consolidate between 25,200 and 25,430 for some time before making a bullish breakout above 25,430.
Nifty 50 Futures
The Nifty 50 September Futures (25,345) is trading flat. The contract made a high of 25,410 and has come down from there.
Resistance is around 25,420. The contract has to break above this resistance to move up towards 25,520.
Intermediate support is around 25,290. A break below it can drag the contract down to 25,200 during the day.
The region around 25,200 and 25,180 is a strong support which can limit the downside. We can expect the Nifty 50 Futures contract to bounce back from this support zone and resume the rally thereafter.
Overall, the outlook is bullish to see a rise to 25,550. But whether this rise will happen from here itself or after a fall to 25,200 is not clear now.
Trade Strategy
Go long only on a break above 25,420. Keep the stop-loss at 25,390. Trail the stop-loss up to 25,440 as soon as the contract moves up to 25,465. Move the stop-loss further up to 25,480 when the contract touches 25,495. Exit the long positions at 25,510.
Supports: 25,290, 25,200
Resistances: 25,420, 25,550