Nifty call: Initiate trade along the direction of the break

Nifty 50 October Futures (18,315)

Although the Asian markets are trading in the red since morning, the domestic equity market indices opened with a gap-up open. Nevertheless, the indices did not rally much, and the Nifty 50 is hovering around 18,300 (up by 0.2 per cent) and the Sensex is at around 61,460 (up by 0.2 per cent).

The market breadth of the Nifty 50 is showing a bullish bias 31-19 and the mid- and small-cap indices are in the green, gaining between 0.3 and 0.9 per cent. Among the sectoral indices, the Nifty PSU index is the top gainer, up by 2 per cent followed by the Nifty Pharma index, up by 1.5 per cent. On the other hand, the Nifty Media is the top loser, down by 1.4 per cent followed by the Nifty Private bank index, down by 0.8 per cent.

Futures: The October futures of the Nifty 50 index opened the session almost flat at 18,308 versus yesterday’s close of 18,314. Since open, the contract has largely been moving sideways between 18,270 and 18,350 and until either of these levels are breached, the intraday trend will remain uncertain. Hence, traders can wait for now and initiate trade along the direction of the break of the above-mentioned range.

A breakout of 18,350 can lift the contract to the immediate resistance at 18,450, above which it can touch 18,500. But in case of the contract breaks down below 18,270 it can find an immediate support at 18,250. Below this level, support can be seen at 18,200 and 18,175.

Strategy: Wait for the break of the range 18,270 and 18,350; initiate trade along the direction of the break

Supports: 18,270 and 18,250

Resistances: 18,350 and 18,450

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