Nifty 50 June futures (22,675)
Nifty 50 is attempting to bounce back after falling all through the week. The index is trading at 22,529, up 0.18 per cent. The advances/ declines ratio is at 24:26. This is not in favour of the bulls at the moment. So, traders have to tread with caution for the day.
Nifty 50 outlook
The bounce seen today seems to lack strength. Nifty made an intra-day high of 22,653.75 and has been coming down from there. This indicates the presence of strong sellers at higher levels. This can keep the broader downtrend intact.
Immediate resistance is around 22,600. Above that, the next strong resistance is around 22,700. As long as the index trades below 22,700, the view will remain bearish. Nifty can fall to 22,300 in the coming sessions.
Global indices
Asian markets are in the green. Hang Seng (18,402.19) is up 0.94 per cent. Nikkei 225 (38,368.30) is up 0.83 per cent. Kospi (2,645) and Shanghai Composite (3,099) are up about 0.4 and 0.3 per cent respectively.
The Dow Jones Industrial Average (38,111.48, down 0.86 per cent) has come down sharply this week. It can now test 37,800. The price action thereafter will need close watch. Failure to bounce back from around 37,800 can drag the Dow Jones down to 37,500-37,300 going forward.
Nifty 50 futures
The Nifty 50 June futures (22,675) is up 0.21 per cent. The contract has strong resistance in the broad 22,750-22,800 region. The outlook is bearish to see a fall to 22,550 during the day. A break below 22,550 can trigger a steeper fall to 22,400.
The Nifty 50 June futures contract will have to rise past 22,800 decisively to become bullish again. But that looks less likely.
TradesStrategy
Traders can go short now at 22,675. Add shorts on a rise at 22,720. Keep the stop-loss at 22,770 initially. Trail the stop-loss down to 22,640 as soon as the contract falls to 22,610. Move the stop-loss further down to 22,600 when the contract touches 22,580. Exit the shorts at 22,560.
Supports: 22,550, 22,400
Resistances: 22,700, 22,750