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BL Research Bureau
Nifty 50 October Futures (17,860)
The Nifty 50 opened the day on the front foot by beginning with a gap-up open. Similarly, the other domestic benchmark index, the Sensex, saw a gap-up open today. As it stands now, both the indices are trading with a gain of nearly 0.5 per cent – the Nifty is at 17,865 and the Sensex is at 59,940.
Signals from the Asian markets seems optimistic following a positive close in the US overnight – the Dow Jones gained 1 per cent and the broader S&P 500 gained a little over 0.8 per cent. Among the Asian majors, ASX 200 and Nikkei 225 today posted a gain of 0.9 and 1.3 per cent, respectively.
That said, the sentiment seems to be affirmative for the equity market bulls today. On the NSE, like the benchmark, all the mid- and small cap indices are in the green and the advance-decline ratio of the Nifty 50, at 32-18, is inclined to upside as well. Nevertheless, the sectoral indices look mixed with the Nifty IT (up by 1.6 per cent) as the best performer and the Nifty Realty (down by 2.9 per cent) as the top loser.
Futures: The October futures of the Nifty 50 index opened with a gap-up at 17,883 as against yesterday’s close of 17,808. While it initially declined to mark an intraday low of 17,835, it recovered and rallied to hit an intraday high of 17,940. Currently trading at 17,860, the bulls look to be struggling to find the momentum to take the contract forward, especially on the face of the critical resistance at 18,000. The band of 17,975 and 18,000 is a resistance band above the hurdle at 17,940.
As it stands, the probability of the index moving beyond 17,975 looks low today and so, traders can consider initiating intraday short positions. That is, short if only the futures rally to 17,900 and sell again at 17,940. Place stop-loss at 17,975.
From the current level of 17,860, the nearest support is at 17,800, which can be the primary target for the shorts. A breach below it can drag the contract to 17,745.
Strategy : Sell on rallies at 17,900 and at 17,940; stop-loss at 17,975
Supports: 17,800 and 17,745
Resistances: 17,900 and 17,940
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