The Nifty 50 rallied towards the end of yesterday’s session after remaining largely flat for most of the session. The index carried over this momentum as it opened higher at 22,614, versus yesterday’s close of 22,598. It moved up further and is now hovering around 22,670, up 0.3 per cent.
Substantiating the positive inclination, the advances/ declines ratio of the Nifty 50 stands at 36/14. L&T, up 1.8 per cent, is the top performer, whereas Power Grid Corporation of India, down 3.7 per cent, is the top loser.
Like the benchmark index, mid- and small-cap indices have advanced. Among the sectors, Nifty PSU Bank, up 1.65 per cent, tops the list. On the other hand, Nifty Pharma and Nifty Healthcare, down 1.1 per cent each, are the top losers.
For Nifty 50, the price action is bullish. However, one should be cautious as the index is approaching a crucial resistance at 22,750. There might be some profit-booking, leading to a corrective decline.
Nifty 50 futures
May futures of the Nifty 50 opened today’s session slightly lower at 22,650, as against yesterday’s close of 22,658. However, it rallied post the opening and is now trading at 22,720, up 0.3 per cent.
Given the prevailing price action, the contract will most likely rally to 22,850, a resistance. Subsequent resistance is at 22,950. There is a good chance that Nifty futures will see a downward reversal in the 22,850-22,950 range. In that case, there could be a fall to 22,500.
On the other hand, if the contract breaks out of 22,950, it will most likely appreciate to 23,200 or even to 23,500.
Trading strategy
Since the intraday trend appears bullish, traders can buy Nifty futures now at 22,720. Add longs if it dips to 22,680. Place stop-loss at 22,620. When the contract surpasses 22,800, raise the stop-loss to 22,740. Book profits at 22,850.
Supports: 22,680 and 22,620
Resistance: 22,850 and 22,950
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