Nifty 50, the domestic benchmark index, began today’s session with a gap-down at 22,617 versus yesterday’s close of 22,705. It is hovering around 22,585, down 0.5 per cent at the end of the first hour of today’s session.

Substantiating the bearish bias, the advance/decline ratio of Nifty 50 stands at 8/42. Also, all mid- and small-cap indices are in the red. Among the sectors, Nifty Media, up 0.8 per cent, is the top gainer whereas Nifty Metal, down 1.6 per cent, is the top loser.

Note that key Asian equity indices have been facing downward pressure since morning. Among the major indices, Nikkei 225 (38,080), ASX 200 (7,625), Hang Seng (18,260) and KOSPI (2,640) have lost between 0.5 and 1.4 per cent.

Nifty 50 futures

The May futures of Nifty 50 opened lower at 22,680 as against yesterday’s close of 22,744. It is now trading at 22,560, down 0.8 per cent.

The trend has been bearish this week and so, the bears are at an advantage at the moment. However, note that 22,550 is a strong support where both the 20- and 50-day moving average coincides.

If this level is breached, the downswing can extend to 22,330, a support. On the other hand, if there is a bounce, it can recover to 22,650 or even to 22,750, notable resistance levels.

The May contracts expiry today and so, there might be higher than usual volatility today. So, traders need to be very cautious.

Trading strategy

Although Nifty futures show bearish inclination, it has a support ahead. Moreover, today is a monthly expiry day. So, we suggest traders stay out of the market today.

Supports: 22,550 and 22,330

Resistances: 22,650 and 22,750

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