Nifty 50 (18,650) and Sensex (62,915) have begun the session with a gap-up. After the first hour of trade, both indices remain positive. However, they are now trading near a crucial level (18,660 for Nifty and 63,000 for Sensex) and the next leg of trend depends on how the indices react to these levels.
That said, the major indices in Asia are in the green. Barring Nikkei 225 (32,180), down by 1 per cent, other majors like ASX 200 (7,135), Hang Seng (19,290), and KOSPI (2,620) are up between 0.2 and 1 per cent.
The market breadth of the domestic indices show bullish inclination. For instance, the advance/decline ratio of Nifty 50 stands at 38/12. Moreover, all mid- and small-cap and all sectoral indices are up so far today. This shows broad-based buying.
Among the sectors, Nifty Media is the top gainer, up by 0.9 per cent. Notably, others like Nifty FMCG, Nifty Realty, and Nifty Healthcare have gained over 0.8 per cent each.
Nifty 50 futures
The June expiry futures of Nifty 50 began the session higher at 18,716 versus yesterday’s close of 18,673. It is now hovering around 18,735.
Given the positive sentiment, the contract is likely to gain from the current level. Potential resistance levels are at 18,800 and 18,850. On the other hand, if there is a decline from here, which is less likely, Nifty futures can find support at 18,700 and 18,650.
Trading strategy
Although the sentiment is bullish, the price level of 18,735 can resist the bulls. Therefore, traders can stay on the sidelines for now and buy Nifty futures on a breakout of 18,750. Target and stop-loss levels can be at 18,850 and 18,700.
Supports: 18,700 and 18,650
Resistance: 18,800 and 18,850