Nifty 50 (19,770) and Sensex (66,580) have opened today’s session on a flat note despite the positive cues from the Asian market.

Among the major Asian indices, Nikkei 225 (33,365), ASX 200 (7,440) and KOSPI (2,660) are up between 0.4 and 1.1 per cent.

That said, the market breadth is positive i.e., the advance/decline ratio of Nifty 50 stands at 30/20 and the mid- and small-cap indices are in the green.

In addition, most of the sectoral indices have advanced today. As it stands, Nifty IT and Nifty Media, up by nearly 0.6 per cent each, are the top performers. On the other hand, Nifty Realty, down by 0.9 per cent, is the only index that is down.

Nifty 50 futures

The August futures contract of Nifty 50 opened today’s session slightly higher at 19,862 versus yesterday’s close of 19,844. It is currently trading at around 19,840.

From the current level, the nearest resistance can be spotted at 19,900 and immediately above it is a trendline resistance at around 19,940. Therefore, 19,900-19,940 is a resistance band. A breach of 19,940 can quickly push the contract up to 20,000.

The nearest support is at 19,800 and subsequent support is at 19,685.

Trading strategy

Even though there are bullish signs, Nifty futures is facing a resistance band between 19,900 and 19,940. Thus, the risk-reward ratio is not favourable to initiate longs at the current level of 19,840.

On the other hand, there is a good support at 19,800. Therefore, the prevailing conditions are not conducive to take trades on either side. The contract should breach either 19,940 or 19,800 in order to establish a trend. Until then, stay out of the market.

Supports: 19,800 and 19,685

Resistance: 19,900 and 19,940

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