Nifty 50 June Futures (18,558)

Nifty 50 and Sensex are struggling to move up. Both the indices have come off from their highs giving back almost all the gains. The benchmark indices are trading flat now. Nifty is trading at 18,486 and Sensex at 62,414.

Nifty has to rise past 18,600 to bring back the bullishness. Only in that case, the broader uptrend can resume towards 18,700-18,800 and higher. As long as the index stays below 18,600, a fall to 18,400-18,350 first cannot be ruled out. Thereafter, a fresh leg of upmove can begin.

Global indices

All major Asian indices are trading sharply higher. Developments on the US debt ceiling deal are supporting the indices. Surprisingly, that is not happening with the Indian benchmark indices. Hang Seng (18,883) is up over 3 per cent. Nikkei 225 (31,480) and Kospi (2,595) are up over a per cent.

In the US, the Dow Jones Industrial Average (33,061.57) has risen back above 33,000. It will have to be seen if it can sustain the bounce and move further up towards 33,200-33,300. For now, the index is getting good support around 32,700. A break below 32,700 will only bring the index under more selling pressure.

Nifty 50 futures

The Nifty 50 June Futures (18,558) has come-off sharply from the high of 18,656 and is now trading flat. The contract has good resistance around 18,600. A sustained rise past this hurdle is needed for the contract to move up towards 18,700.

The price action on the charts leaves the near-term bias negative. We expect the Nifty 50 June Futures contract to fall towards 18,500-18,450 in the near-term.

Trading strategy

Traders can go short now and at 18,580. Keep the stop-loss at 18,615. Trail the stop-loss down to 18,540 as soon as the contract falls to 18,520. Move the stop-loss further down to 18,510 when the contract touches 18,495 on the downside. Exit the short positions at 18,470.

Supports: 18,500, 18,450

Resistances: 18,600, 18,700

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