Nifty 50 October Futures (18,180)

Asian markets are trading mixed today as the ASX 200 is flat, the Nikkei 225 is up by 1.7 per cent and the Hang Seng is down by 0.6 per cent. Against this background, the Indian benchmark indices opened with a minor gap-up but gave away the gains. The Nifty 50, at 18,160, is up by 0.2 per cent and the Sensex, at 60,990, is flat.

The market breadth of the Nifty 50, at 36-14, is showing bullish bias and all small- and mid-cap indices are in the green, gaining between 0.7 and 2.1 per cent. Among the sectoral indices, the Nifty Private bank (down by 0.4 per cent) and the Nifty Pharma index (down by 0.15 per cent) are the only losers today. The Nifty Realty and Consumer durables are the top gainers, up by 2.9 and 1.6 per cent, respectively.

Futures: The October futures of the Nifty 50 index opened the session with a gap-up at 18,180 versus yesterday’s close of 18,145. While it rallied initially and made an intraday high of 18,285, it lost the momentum and dropped below the support of 18,200 and is now hovering around 18,180. A decisive breakout of 18,200 is necessary for the bulls to stay in control and establish an intraday rally. So, traders can wait for now and buy Nifty futures if it rallies past 18,200 with stop-loss at 18,150.

A rally above 18,200 can take the contract above 18,285 and touch 18,300. Consider booking profit at this level and can go long again if 18,300 is invalidated. Because the price action over the past few sessions show that the contract is likely to stay range bound between 18,000 and 18,300.

Within this price band, the nearest support from the current level is at 18,085. Support below 18,000 is at 17,920. Resistances above 18,300 can be seen at 18,370 and 18,400.

Strategy: Buy the contract when it breaches the resistance at 18,200 for a target of 18,300. Keep the stop-loss at 18,150

Supports: 18,085 and 17,920

Resistances: 18,200 and 18,300

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