Nifty 50 (20,150) and Sensex (67,650) have begun today’s session with a gap down after having gained last week. Both indices are down nearly one-third of a per cent.
This is following bearish cues from the Asian market. Among the major indices, ASX 200 (7,235), Hang Seng (17,990) and KOSPI (2,580) are down between 0.6 and 1.4 per cent.
In the domestic market, while the mid-cap indices are down like the benchmark indices, the small-cap indices have gained.
Among the sectors, Nifty PSU Bank is the top gainer, up 2.2 per cent whereas Nifty IT, down 0.6 per cent, is the worst performing sectoral index.
Although Nifty 50 and Nifty futures have begun on the back foot, the overall trend is bullish and so, the downside could be limited.
Nifty 50 futures
The September futures contract of Nifty 50 opened today’s session lower at 20,205 versus last week’s close of 20,249.60. It is currently trading at 20,210.
The contract has a strong support at 20,180 and so, there is a good chance for it to bounce and rally to 20,300, a potential resistance. Subsequently, the contract could face a barrier at 20,500.
On the other hand, if Nifty futures slip below 20,180, it could extend the downswing to 20,100, a support, Next support is at 20,080.
Overall, the inclination is bullish and Nifty futures can appreciate further from here.
Trading strategy
We recommend going long on Nifty futures now at around 20,210. Target and stop-loss can be at 20,300 and 20,170.
Note that this is an intraday trade suggestion. Exit if neither target nor stop-loss is hit by the end of the day.
Supports: 20,180 and 20,100
Resistance: 20,300 and 20,500