Nifty 50 July Futures (19,777)

Nifty 50 and Sensex are trading marginally lower. Both the indices are down about 0.05 per cent each. Nifty 50 is trading at 19,741 and Sensex at 66,662.

Nifty has a crucial support at 19,690. A break below it will be bearish to see 19,600 and lower levels. The index has to sustain above 19,690 and gain momentum to breach 19,800. Only in that case the upmove can gain strength and take Nifty up to 20,000 again. So the price action around 19,690 will need a close watch today.

Global indices

In Asia, barring the Hang Seng (18,808), other major indices are in green. Hang Seng is down 1.4 per cent. Nikkei 225 (32,716), up 1.3 per cent, is outperforming others.

In the US, the Dow Jones Industrial Average (35,227.69) remained stable in a narrow range on Friday. It has resistance near 35,600. A strong rise past this hurdle can take the Dow Jones up to 36,000 this week.

The US Federal Reserve meeting outcome is due on Wednesday. A 25-basis point rate hike is expected this week.

Nifty 50 Futures

The Nifty 50 July Futures (19,777) is trading flat. Strong support is around 19,700 which looks to be holding well. The contract has bounced well from the intraday low of 19,721. If this bounce sustains, a rise to 19,825-19,850 is possible during the day.

From a broader picture, the Nifty 50 July Futures contract has to rise past 19,850 to regain the bullishness and rise to 19,900 and 20,000 going forward.

So, broadly, 19,700-19,850 can be the trading range for now. In case the contract breaks below 19,700, it can fall to 19,600.

Trade Strategy

Considering the risk reward ratio, we suggest traders to stay out of the market today. Wait and watch as on which side of 19,700-19,850 does the contract breaks out. Trades can be taken accordingly thereafter.

Supports: 19,700, 19,600

Resistances: 19,800, 19,850

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