Nifty 50 and Sensex are recovering from the sharp fall witnessed on Friday. Both the indices are up about 0.4 per cent. Sensex is trading at 65,537 and Nifty at 19,409.
The support at 19,300 on the Nifty is holding well as of now. It is now important to see if the index is getting a strong follow-through rise from here or not. Immediate resistance is at 19,420. A strong break above it can take the Nifty up to 19,530-19,550. But failure to breach 19,420 can drag the index down to 19,300 again. So it is a wait-and-watch situation now.
Global indices
Asian markets are trading mixed. Nikkei 225 (32,177) is down 0.65 per cent and Kospi (2,528) is trading flat. Hang Seng (18,509) and Shanghai Composite (3,202) are up 0.8 and 0.2 per cent respectively.
In the US, the Dow Jones Industrial Average (33,735) fell further on Friday in line with our expectation. The index has room to test 33,600-33,500. Thereafter it can bounce back towards 34,500 in the short-term.
Nifty 50 futures
The Nifty 50 July futures (19,460) is up 0.32 per cent. The contract is getting support in the 19,400-19,380 region. Intermediate support is at 19,440. If the contract manages to sustain above it, a rise to 19,500 is possible. A break above 19,500 will see the upmove extending up to 19,550-19,570.
The near-term outlook will turn negative only if the contract declines below 19,380. Such a break can drag it down to 19,300. But that looks less likely.
Trade strategy
Traders can go long now and accumulate at 19,420. Keep the stop-loss at 19,370. Trail the stop-loss up to 19,480 when the contract moves up to 19,510. Move the stop-loss further up to 19,520 when the contract touches 19,545. Exit the longs at 19,560.
Supports: 19,440, 19,380
Resistances: 19,500, 19,570