Nifty 50 May futures (22,192)

Nifty 50 is attempting to recover after falling through the week. The support around 21,900 is holding well. The index is currently trading at 22,124, up 0.77 per cent. The advances/ declines ratio is at 44:6. It is important to see if the bounce sustains. Also, today’s close will be important, and would give a cue on the direction for the next week.

Nifty 50 Outlook

An important resistance is around 22,200. Nifty has to break above this hurdle to ease the downside pressure. Only in that case can the index gain some momentum and rise to 22,500. Failure to breach 22,200 and a turnaround from there can keep the index under pressure. In that case, Nifty will remain vulnerable for a fall to 21,900-21,800 in the coming sessions. As such, the price action around 22,200 will need close watch today.

Global indices

In Asia, the Shanghai Composite (3,147) is down 0.22 per cent. Other major indices are in the green. Hang Seng (18,859) is up 1.7 per cent. Nikkei 225 (38,155) and Kospi (2,727) are up 0.21 and 0.56 per cent respectively.

The Dow Jones Industrial Average (39,387) is retaining its momentum and continues to move up. It is on the verge of testing 39,500 in line with our expectation. It is important to see whether the Dow Jones breaks above 39,500 or reverses lower again from there.

Nifty 50 futures

The Nifty 50 May futures (22,192) contract is up 0.5 per cent. If the bounce sustains, the contract can rise to 22,300 today. But a break above 22,300 might not be easy. A reversal from around 22,300 can drag the contract down to 22,000 again. That will keep the contract vulnerable to break 22,000 and fall to 21,800.

On the other hand, a decisive break above 22,300 will ease the downside pressure and take the contract up to 22,400-22,500 thereafter.

Trade strategy

Traders can stay out of the market today. See what happens to the resistance at 22,300 and how the contract closes for the week today. Trades can be taken accordingly next week.

Supports: 22,060, 22,960

Resistances: 22,300, 22,400

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