Nifty 50 May futures (22,620)

Nifty 50 is trading lower. The index does not seem to be getting strong follow-through support after moving up well on Thursday. It is currently trading at 22,534, down 0.15 per cent. The advances/ declines ratio is at 23:24. The mixed picture could see the index move in either direction.

Nifty 50 index outlook

Nifty has come off its intraday high of 22,620. It seems to lack strong follow-through buying above 22,600. That leaves the door open for it to drop to 22,475 during the day. A fall below 22,475 can drag the index further down to 22,400 during the day. A sustained rise above 22,620 is needed for it to gain momentum and rise to 22,700-22,800 levels.

Global indices

Most of the major Asian markets are in the green. Nikkei 225 (38,038), Kospi (2,656) and Hang Seng (17,626) are all up over one per cent each. The Shanghai Composite (3,076) is up about 0.8 per cent.

The Dow Jones Industrial Average (38,085.80) has come down sharply. The outlook is bearish. The index can fall to 37,600-37,500 from here. The downside can extend up to 37,200-37,000 in the short-term.

Nifty 50 futures

The Nifty 50 May futures (22,620) is down 0.15 per cent. The resistance at 22,700 has held very well. The contract made a high of 22,705 and has come down sharply from there. The contract can fall to 22,590 from here. A break below 22,590 can drag it down to 22,500 during the day.

A sustained rise above 22,700 is needed for the contract to move further up to 22,800-22,850.

Trade Strategy

Traders can go short at 22,620. Keep a stop-loss at 22,660. Trail the stop-loss down to 22,605 when the contract falls to 22,595. Move the stop-loss further down to 22,580 when the contract touches 22,560. Exit the shorts at 22,530.

Supports: 22,590, 22,500

Resistances: 22,700, 22,850.