Nifty 50 and Sensex have given back all the gains after opening with a gap-up. Both indices are down about 0.12 per cent each. Sensex is trading at 61,685 and Nifty is at 18,245. Nifty has support at 18,200. A bounce from there can take it up to 18,300-18,350 again. The chances of a steeper fall will increase only if Nifty declines below 18,200. In that case a revisit of 18,100-18,000 is possible.
Global indices
All major Asian indices are in red. Shanghai Composite (3,310) fell the most, losing 1.4 per cent.
In the US, the Dow Jones Industrial Average (33,561) has dipped further. A break below 33,500 can drag it to 33,300 and 33,300 in the coming days. On the other hand, resistance is at 33,800. The Dow has to surpass this hurdle to move further up towards 34,000 and 34,300. The price action in the next few days is going to be very important.
Nifty 50 futures
The Nifty 50 May Futures (18,295) is marginally down by 0.1 per cent. Supports are at 18,250 and 18,180. Resistance is at 18,340. The contract has to breach this resistance to become bullish again. Only in that case a rise to 18,400-18,500 will come into the picture.
As such, for now, 18,250-18,340 can be the trading range. A breakout on either side of this range will then determine where the contract can go.
Trade strategy
We see equal chances for the Nifty 50 May Futures contract to swing either way from current levels. Considering the risk-reward ratio, we suggest traders to stay out of the market.
Supports: 18,250, 18,180
Resistances: 18,340, 18,400
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