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Nifty 50 is recovering in its early trades after witnessing a fall on Monday. The index is currently trading at 22,433, up 0.44%. The advance/decline ratio is at 26:24. If the ratio turn-down then that could cap the upside in the Nifty. So, we will have to wait and see if the current bounce is gaining momentum or not.
Nifty outlook
An immediate resistance for the Nifty is at 22,450. A break above it can take the index up to 22,530-22,550 and even 22,600 during the day.
Important support is at 22,350. The index will come under pressure for a fresh fall only if it breaks below this support. If that happens, Nifty can fall to 22,200-22,150.
Global indices
Asian markets are mixed. Nikkei 225 (38,584) and Shanghai Composite (3,054) are down 0.6 and 0.47 per cent respectively. Kospi (2,672) and Hang Seng (16,870) are up 0.48 and 1.7 perc cent respectively.
The Dow Jones Industrial Average (38,769) was up 0.12 per cent on Monday. Although it is getting support below 38,500 now, it is important for the index to rise past 39,000 to regain the bullish momentum. Failure to rise past 39,000 can continue to keep the Dow Jones vulnerable for a fall to 38,000 and lower in the coming days.
Nifty 50 Futures
The Nifty 50 March Futures (22,525) is up 0.46 per cent. The bias on the charts looks positive. Immediate support can be in the 22,500-22,470 region. Below that the next support is around 22,450. As long as the contract trades above 22,450, the outlook will be bullish to see a rise to 22,600-22,700 in the coming sessions.
The Nifty 50 March Futures contract will have to fall below 22,450 to become bearish. In that case a fall to 22,300 can be seen,
Trade Strategy
Traders can wait for dips to take long positions. Go long at 22,490 and 22,460. Keep a stop-loss at 22,420. Trail the stop-loss up to 22,510 as soon the contract moves up to 22,535. Move the stop-loss further up to 22,545 when the contract touches 22,560. Exit the long positions at 22,590.
Supports: 22,450, 22,300
Resistances: 22,600, 22,700
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