Nifty futures (19,290)

Nifty 50 (19,300) opened today’s session almost flat at 19,286.45 versus Monday’s close of 19,281.75. It is now up by a marginal 0.15 per cent.

There are no clear signs from the Asian equity market. Among the majors, Nikkei 225 (31,425) and Hang Seng (17,235) have gained 1.2 and 1.4 per cent respectively. Whereas ASX 200 (6,850) is trading flat and KOSPI (2,375) is down 0.4 per cent.

Despite this mixed signal, the domestic benchmark, Nifty 50, is on the positive side so far. Supporting the bullish bias, the advances/ declines ratio of the index stands at 30/20. Also, all the mid- and small-cap indices are in the green.

However, traders need to be cautious as the trend has been bearish of late. So, the rally could be temporary i.e., a corrective up-move.

Notably, Nifty 50 and Nifty futures are trading above a support. Bulls should capitalise on this and push the prices up. But if the support is breached, we could see another leg of downtrend. 

Nifty 50 futures

The October futures contract of Nifty 50 opened today’s session higher at 19,306, versus Monday’s close of 19,269.20. It is currently hovering around 19,290, up 0.1 per cent.

The price action is bearish and as it stands, the likelihood of Nifty futures resuming the downtrend looks high. Bears could drag the contract to 19,100, a support. Subsequent support is at 19,000.

On the other hand, if the contract recovers past 19,380, the rally could extend to 19,500, a resistance. Next resistance is at 19,600.

Trading strategy

We suggest going short on Nifty futures now at 19,290, and add shorts in case it moves up to 19,340. Place stop-loss at 19,400.

When the contract touches 19,180, tighten the stop-loss to 19,230. Book profits at 19,110.

Supports: 19,100 and 19,000

Resistance: 19,380 and 19,500

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