Nifty 50 October Futures (24,390)
Nifty 50 is witnessing a recovery rally now. The index has risen well in the opening trades today. It is currently trading at 24,365, up 0.77 per cent. The advances/declines ratio is at 36:14. If this trend sustains, then Nifty can rise further during the day. We will have to wait and watch.
Nifty 50 outlook
Nifty (24,365) has room to rise towards 24,450-24,500 from here. But the price action thereafter will need a close watch. The broader trend is down. So, the chances are very high for the Nifty to turn down from around 24,500 and fall back to 24,000 again in the coming days.
So, more caution is needed now rather than becoming bullish again at this point of time.
Nifty 50 Futures
The Nifty 50 October Futures (24,390) is up 0.8 per cent. The contact has room to rise further towards 24,500-24,550. But thereafter we expect it to reverse lower again and resume the downtrend.
That leg of fall will take the Nifty 50 October Futures contract down to 24,200-24,000 again.
Only a strong rise above 24,550 will turn the outlook convincingly bullish. As of now, the contract is just in a corrective bounce within the broader downtrend.
Trade Strategy
Since the broader trend is down, we prefer to be on the sell side of the market. So, wait for a rise. Go short at 24,480 and 24,520. Keep the stop-loss at 24,580. Trail the stop-loss down to 24,460 as soon as the contract falls to 24,420. Move the stop-loss further down to 24,410 when the contract touches 24,370. Exit the short positions at 24,320.
Supports: 24,300, 24,100
Resistances: 24,500, 24,550