Nifty 50 (18,860) and Sensex (63,530) opened today’s session with a gap-up despite the broader sentiment appearing negative in the Asian equity market.
Among the major indices, barring Nikkei 225 (33,650), up by 0.8 per cent, other indices namely ASX 200 (7,335), Hang Seng (19,240), and KOSPI (2,585) are down between 0.3 and 1.9 per cent.
The positive bias in the domestic market is substantiated by the mid- and small-cap indices, which are in the green. Also, most of the sectors have gained today led by Nifty Media, up by 2.2 per cent. On the other hand, Nifty Metal, down by nearly 0.7 per cent, is the top loser.
The above factors hint at broad-based buying in the domestic market. Consequently, the benchmark index Nifty 50 is likely to extend the gains.
Nifty 50 futures
The June futures contract of Nifty 50 opened today’s session slightly higher at 18,873 versus yesterday’s close of 18,865. After marking a high of 18,909, the contract is now trading around 18,870.
The price level of 18,900 is a resistance. But given the momentum, the Nifty futures is expected to rally past this level and touch 19,000 soon. After reaching 19,000 there might be a correction because of the potential profit-booking.
That said, if the contract falls from the current level, it can find support at 18,850 and 18,800. As long as the support at 18,850 holds true, the bulls will have the upper hand.
Trading strategy
Buy Nifty futures now at around 18,870. Add more longs if the price dips to 18,850. Place stop-loss at 18,800.
When the contract goes above 18,920, tighten the stop-loss to 18,850. Further, move the stop-loss up to 18,920 when Nifty futures touches 18,975. Book profits at 19,000.
- Supports: 18,850 and 18,800.
- Resistance: 18,900 and 19,000.