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The Indian benchmark indices are staying stable after falling sharply on Thursday. Sensex and Nifty 50 are marginally higher. Nifty 50 is up 0.07 per cent and is trading at 16,825. Sensex is at 56,476 and is up 0.12 per cent.
Nifty made a low of 16,748.70 and has bounced-back well from there. The price action indicates lack of strong sellers below 16,800 as of now. But it will have to be seen if the index can rise past 16,850, which is much needed to revisit 17,000 levels.
Global indices
All major Asian indices are trading in the red. Nikkei 225 (25,836, down 2.21 per cent) is the most beaten down. Shanghai Composite (3,035), Hang Seng (17,154) and Kospi (2,164) are down in the range of 0.1-0.32 per cent.
In the US, the Dow Jones Industrial Average (29,225.61, down -1.54 per cent) came down sharply, failing to sustain the bounce seen on Wednesday. This keeps the broader downtrend intact. Important support to watch is at 28,900. A break below it will drag the index down to 28,200.
Nifty Futures
The Nifty 50 October Futures (16,875) is up 0.25 per cent. The contract has risen back well from the day’s low of 16,674. While this momentum sustains, there is room to rise further towards 16,970-17,000.
However, whether the contract will manage to rise past 17,000 or not is going to be very crucial in determining the direction of move going forward. A strong and sustained break above 17,000 will be bullish. But a pull-back from 17,000 can keep the Nifty Futures contract under pressure to fall back towards 16,800 and lower levels.
Traders with high-risk appetite can go long at current levels with a very tight stop-loss at 16,820. Trail the stop-loss up to 16,895 as soon as the contract rises to 16,930. Move the stop-loss further up to 16,935 when the contract touches 16,955 on the upside. Exit the longs at 16,985.
Trading Strategy: High-risk appetite traders can go long now. Keep the stop-loss at 16,820 for the target of 16,985. Trail the stop-loss up to 16,895 as soon as the contract rises to 16,930. Move the stop-loss further up to 16,935 when the contract touches 16,955 on the upside.
Supports: 16,800, 16,750
Resistances: 16,970, 17,060
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