Nifty 50 (19,775) and Sensex (66,890), after opening flat, have moderated in the first hour of trade and are now down by one-third of a per cent each.

Interestingly though, the mid- and small-cap indices appear better than the benchmark indices. For instance, Midcap 50 and Smallcap 50 are up by 0.15 per cent each. 

Looking at the market breadth, we can see a bearish bias. For example, the advance/decline ratio of Nifty 50 stands at 9/41.

Among the sectors, Nifty PSU Bank is the top gainer, up by 1 per cent whereas Nifty IT is the biggest loser, down by 1.2 per cent.

The Asian equity market does not give a definite signal as the major indices look mixed. Among them Nikkei 225 (32,520) and KOSPI (2,600) are down by 1.1 and 0.25 per cent whereas ASX 200 (7,340) and Hang Seng (18,990) are up by 0.2 per cent each.

Nifty 50 futures

The July futures contract of Nifty 50 opened today’s session flat at 19,845 versus yesterday’s close of 19,847. It is currently trading at around 19,800.

Although the contract is down 0.2 per cent, the overall trend is bullish. That said, the intraday trend will turn weak only on a fall below the support at 19,750.

So, Nifty futures is positive could resume the rally from the current level of 19,800 or after a decline to 19,750. There is a potential to touch 19,950.

But if the contract falls below 19,750, we are likely to see the downswing extending to 17,700 or even to 19,630.

Nevertheless, as it stands, the bias is bullish and it will remain so until the support at 19,750 holds true.

Trading strategy

Buy Nifty futures now at 19,800 and add more longs on a fall to 19,750. Place initial stop-loss at 19,700.

When the contract goes above 19,900, tighten the stop-loss to 19,850. Book profits at 19,950. 

Supports: 19,750 and 19,700

Resistance: 19,950 and 20,000

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