Nifty 50 July futures (19,178)

The Nifty 50 and Sensex are trading higher. Nifty 50 is trading at 19,082, up 0.6 per cent. Sensex at 64,337 is up 0.65 per cent.

A crucial resistance for the Nifty is at around 19,100. A strong rise and a decisive close above this hurdle is needed today if the rally is to sustain going forward. Failure to breach 19,100 and a fall below 19,000 in the coming sessions will increase the chances for a corrective fall. As such, price action in the next few sessions will need to be closely watched.

Global indices

The Asian markets are mixed. The Nikkei 225 (33,035) is down 0.6 per cent. On the other hand, the Kospi (2,563), Hang Seng (18,939) and Shanghai Composite (3,208) are in the green.

In the US, the Dow Jones Industrial Average (34,122) has risen well above 34,000. A fall to 33,500 that we mentioned earlier this week, has not happened. The outlook is bullish. Dow Jones could rise to 34,300-34,500 from here.

Nifty 50 futures

The Nifty 50 July futures (19,178) is up 0.56 per cent today. Resistance is in the 19,200-19,220 region. Failure to rise past 19,220 can take the contract down to 19,100-19,070 during the day.

A strong rise past 19,220 is needed to sustain the momentum and extend the rise to 18,250-18,300

As such price action in the 19,200-19,220 region will need to be watched closely.

Trade strategy

We expect the 19,200-19,220-resistance region to hold on its first test at least. So, traders with a high-risk appetite can go short at 19,190 and 19,210. Keep the stop-loss at 19,240. Trail the stop-loss down to 19,180 when the contract falls to 19,165. Move the stop-loss further down to 19,155 when the contract touches 19,140 on the downside. Exit the short positions at 19,110.

Please note that this is a contrarian trade. So, as mentioned above, only high-risk appetite traders should enter this position.

Supports: 19,100, 19,000

Resistances: 19,220, 19,250

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