Nifty 50 and Sensex have recovered well after opening with a gap down. Although both the indices are still down about 0.3 per cent, the bounce back from the day’s low is positive. This indicates that the Indian benchmark indices are getting fresh buying at lower levels.
A strong close above 18,200 today on the Nifty will keep the broader picture positive for the index to target 19,000 over the medium-term.
Global indices
In Asia, the indices are trading mixed. Kospi (2,500) and Shanghai Composite (3,328) are trading lower. On the other hand, Nikkei 225 (29,158) and Hang Seng (20,062) are in green.
In the US, the Dow Jones Industrial Average (33,128) continues to fall. It has declined below the key support level of 33,250. Next important support is at 33,000. A break below it will increase the selling pressure and drag it down to 32,500. So, the price action today will be very important.
Nifty 50 Futures
The Nifty 50 May Futures (18,263) opened with a wide gap-down at 18,180 but has recovered most of the loss. It is currently trading lower by 0.2 per cent. If the contract manages to sustain this bounce, a further rise to 18,330 can be seen today.
Intraday support is at 18,240. A break below it can drag the contract down to 18,200-18,180 again.
Trading strategy
Considering the risk-reward ratio, we suggest traders to stay out of the market today. See how the contract closes for the week and then trades can be taken accordingly next week.
Supports: 18,240, 18,200
Resistances: 18,300, 18,335