Nifty 50 September Futures (17,677)
Domestic equity benchmarks continue to remain resilient. Both BSE Sensex and NSE Nifty 50 are bouncing back from their lows after opening the day with a wide gap-down. At the time of filing this report, both the indices were down 0.2 per cent each. Sensex was at 59,331, while the Nifty 50 was trading at 17,685.
Although the Nifty likely to remain subdued in the short-term on the back of the weakness in the global markets, the downside is likely to be limited. Strong supports are at 17,600, which is holding as of now, and then at 17,400-17,350. We expect the Nifty to remain sideways for a few weeks and then see a fresh bullish breakout.
The global equities are under pressure after the US Federal Reserve meeting outcome. The US Fed raised the rates by 75-basis points in line with the market expectation. The central bank’s decision has left the doors open for further hikes for the rest of the year.
All major Asian indices are trading in green. Nikkei (27,162), Shanghai Composite (3,107), Hang Seng (18,097) and Kospi (2,320) are all down in the range of 0.3-1.88 per cent.
In the US, the Dow Jones Industrial Average (30,183.78) tumbled over one per cent. It is heading down towards 30,000-29,500 in line with our expectation. We can expect the Dow to see a bounce from the 30,000-29,500 support zone.
The Nifty 50 September Futures (17,677) is down 0.29 per cent. It made a low of 17,600 and is attempting to bounce back. Market is likely to remain volatile for the next few sessions. Meanwhile, we can expect some wild swings until the market digests the US Fed meeting outcome. Against this backdrop, we suggest traders to stay out of the market for a day or two.
The contract can fall to 17,450 on a break below 17,600. The price action thereafter will need a close watch.
The overall picture is bullish. But, some more downside and a near-term consolidation is possible before a fresh leg of rally begins.
Trading Strategy: Stay out of the market
Supports: 17,600, 17,450
Resistances: 17,700, 17,800