Nifty 50 (18,590) and Sensex (62,720) began the week with a gap-up despite mixed signals from the Asian market. Among the major Asian indices, Nikkei 225 (32,380), and ASX 200 (7,120) are up 0.3 per cent each, whereas Hang Seng (19,380) is flat for the day so far. KOSPI (2,630) is down by about 0.5 per cent.
The positive bias in the domestic market is substantiated by mid- and small-cap indices, which are in the green. Also, the advance/decline ratio of Nifty 50 stands at 34/16 and all the sectoral indices have gained.
Among the sectors, Nifty IT, Nifty Realty, and Nifty Media are the top gainers, up by 1.1 per cent each.
Also read: Global 360: Fed meeting outcome to determine the trend
Nifty 50 futures
The June expiry futures of Nifty 50 began the session higher at 18,650 versus last week’s close of 18,631. It gained further and is now hovering around 18,675.
Note that the contract faces resistance at 18,680. A breakout of this level can result in a rally to 18,800. Although there is a minor hurdle at 18,735, this may not be able to hold the bulls.
On the other hand, if Nifty futures fall off the resistance at 18,675, it is likely to find support at 18,620. Subsequent support is at 18,560.
Also read: Will F&O stocks in Nifty Next 50 reduce tracking error for index funds?
Trading strategy
Go long on Nifty futures if it breaks out of 18,680. Target and stop-loss can be at 18,800 and 18,620.
Supports: 18,620 and 18,560
Resistance: 18,735 and 18,800