Nifty 50 has opened the week on negative note. The index opened with a gap-down at 23,382.30. However, it is bouncing back from the low of 23,350. It is currently trading at 23,430, down 0.30 per cent. The advances/declines ratio is at 19:31. This indicates that the bias is negative.
Nifty 50 outlook
A very crucial support is at 23,350. Resistance is at 23,500. Nifty can oscillate in a range of 23,350-23,500 for some time now. A breakout on either side of this range will determine the next leg of move.
A break below 23,350 will be bearish. Such a break can drag the Nifty down to 23,200. This can be a swift fall as the index has been range bound since last week.
On the other hand, if the Nifty breaks above 23,500, it can be bullish for a rise to 23,600 and 23,700.
Nifty 50 June Futures (23,414)
The Nifty 50 June Futures (23,414) is down 0.32 per cent. The contract fell to a low of 23,335 and has risen back very well from there.
The level of 23,370 and 23,330 are important supports. The contract has to sustain above these supports to avoid more fall. Resistance is at 23,480-23,500. The contract has to breach 23,500 to gain strength and rise to 23,600.
The contract will come under pressure if it declines below 23,330. If that happens, a fall to 23,200 can be seen.
Trade Strategy
Traders can go short on a break below 23,330. Keep the stop-loss at 23,360. Trail the stop-loss down to 23,310 as soon as the contract falls to 23,290. Move the stop-loss further down to 23,275 when the contract touches 23,260. Exit the shorts at 23,240.
Supports: 23,370, 23,330
Resistances: 23,500, 23,600