Nifty 50 August futures (19,781)

The Nifty 50 and Sensex are trying to bounce back after having fallen towards the end of last week. The benchmark indices are trading marginally higher. The Sensex is trading at 66,243, up 0.13 per cent, and the Nifty is at 19,669, up 0.11 per cent.

Although this bounce has provided a breather, it is important to see if the indices are getting a strong follow-through rise. Last week, Nifty failed to breach 19,800 decisively. So, only a sustained rise above 19,800 will bring back the bullish momentum, and pave way for a test of 20,000 on the upside. As long as Nifty stays below 19,800, a fall to 19,500 cannot be ruled out before a reversal happens.

Global indices

Most of the major Asian indices are in the green. ThHe Nikkei 225 (33,098) and Hang Seng (20,208) are up over a per cent. The Kospi (2,628) and Shanghai Composite (3,296) are up 0.8 and 0.6 per cent respectively.

In the US, the Dow Jones Industrial Average (35,459) has been oscillating near the key resistance level of 35,600. It has to breach that hurdle to gain momentum and rise to 36,000. Failure to rise past 35,600 can trigger a corrective fall to 34,800 first and then a fresh rally.

Nifty 50 futures

The Nifty 50 August futures (19,781) is up 0.13 per cent as of now. The contract is supported around 19,700. While this bounce sustains, a test of 19,900 is possible in the coming sessions. However, the contract will gain momentum only on a decisive break above 19,900. In that case, a rise to 20,000 and higher levels can be seen this week.

Failure to breach 19,900 and a fall below 19,700 can take the contract down to 19,600 in the near-term.

Trade strategy

Go long on a break above 19,800. Keep the stop-loss at 19,780. Trail the stop-loss up to 19,820 as soon as the contract moves up to 19,845. Move the stop-loss further up to 19,845 when the contract touches 19,860 on the upside. Exit the long positions at 19,885.

Supports: 19,700, 19,600

Resistances: 19,800, 19,900

Related Topics