Nifty 50 September Futures (17,655)

Sensex and Nifty 50 have bounced back well from their intraday lows. Both indices are up about 0.7 per cent each. Nifty is at 17,656 and Sensex is at 59,241. The support at 17,400 on the Nifty is holding well for now. Nifty made a low of 17,431 and rose back sharply from there. The near-term outlook is mixed. Nifty will have to breach 17,800 decisively to regain the bullish momentum, or can remain under pressure to test 17,400 and even lower levels in the coming days. However, the bigger picture is not looking very weak. The downside is expected to be limited.

Global indices

Major Asian indices are all trading in the red. Japanese markets are closed today. Shanghai Composite (3,121), Hang Seng (18,580) and Kospi (2,356) are all down in the range of 0.16-1.1 per cent.

In the US, the Dow Jones Industrial Average (30,822.42, down 0.45 per cent) fell further on Friday. It is looking weak to test 30,000 and 29,500 on the downside in the coming weeks. This can keep the upside in the Nifty capped for some time.

Nifty Futures

The Nifty 50 September Futures (17,655) fell to a low of 17,456 initially but recovered sharply. It has an immediate support at 17,630. If it manages to sustain above this support, a further rise to 17,740-17,770 can be seen during the day. A break above 17,770 can see an extended rise to 17,830.

The contract will come under pressure only on fall below 17,630. In that case, it can decline back to 17,550 and 17,450 levels in the coming sessions.

Considering the strong bounce from the day’s low, chances are high for the contract to sustain above 17,630 and rise during the day. So, traders with a high-risk appetite can go long at current levels. Keep the stop-loss at 17,610. Trail the stop-loss up to 17,680 as soon as the contract moves up to 17,705. Move the stop-loss further up to 17,710 when the contract touches 17,735 on the upside. Exit the longs at 17,760.

Trading Strategy: Go long now with a stop-loss at 17,610 and for the target of 17,760. Trail the stop-loss up to 17,680 as soon as the contract moves up to 17,705. Move the stop-loss further up to 17,710 when the contract touches 17,735 on the upside.

Supports: 17,630, 17,550

Resistances: 17,770, 17,830

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