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Benchmark indices have rebounded sharply taking cues from the early morning rally in the Asian markets.
Sensex is up 2.22 per cent and is trading at 53,964. Nifty is at 16,167, up 2.26 per cent.
The support at 52,600 on the Sensex and 15,750 on the Nifty are holding well.
We can see a range of 15,750-16,400 on the Nifty and 52,600-55,000 on the Sensex now.
A breakout on either side of this range will determine the next leg of move. The broader trend is down. As such, the bias is negative for the Sensex and Nifty to break their range on the downside and see a fresh fall.
All major Asian indices are trading higher. Nikkei 225 (26,747), Shanghai Composite (3,136), Hang Seng (20,537) and Kospi (2,638) are all up in the range of 1.3-2.1 per cent.
In the US however, the Dow Jones Industrial Average (31,253, down 0.75 per cent) continues to trade weak. It remains bearish to test 30,000 on the downside in the coming days.
Futures
The Nifty 50 May (16,180) Futures is up 2.62 per cent. If the contract manages to sustain this momentum, then a further rise to 16,250 and even 16,350-16,400 is possible in the near-term.
16,350-16,400 is a strong resistance zone which will have to be breached to negate the danger of seeing sharp fall below 16,000 once again.
If such the a price action around 16,350-16,400 is seen, it will need a close watch. Inability to rise past 16,400 can keep the contract in a range of 15,750-16,400.
For now, we prefer to stay out of the market. We will watch how the market closes for the week today and take fresh trade calls accordingly on Monday.
Trading strategy
Stay out of the market.
Supports: 16,000 and 15,750
Resistances: 16,250 and 16,350
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