Nifty 50 April futures (22,784)

Nifty 50 has managed to stay afloat. After witnessing a sharp decline from its intraday high on Monday, the index is attempting to bounce back. It is currently trading at 22,703, up 0.27 per cent. The advances/ declines ratio at 25:24 gives a mixed picture. It also indicates that the intraday movement can go either way from here.

Nifty 50 outlook

Nifty has support in the 22,650-22,600 region. Resistance is around 22,800. So, broadly, 22,600 to 22,800 can be the trading range for now. A breakout on either side of this range will give clarity on the next leg of move.

 A break above 22,800 will be bullish to see 23,000 on the upside this week. On the other hand, a break below 22,600 can take the Nifty down to 22,500-22,400. We will have to wait and see.

Global indices

In Asia, the Hang Seng (17,144) is up 1.9 per cent. Other major indices are in the red. Nikkei 225 (39,645), Kospi (2,705) and Shanghai Composite (3,038) are all down in the range of 0.3-0.45 per cent.

In the US, the Dow Jones Industrial Average (38,883.67) bounced back sharply from its intraday low of 38,572. The near-term outlook is mixed. The index can oscillate in a range of 38,500-39,200. A breakout on either side of this range will determine the next move.

The US Consumer Price Index (CPI) inflation data released today evening will be important to watch.

Nifty 50 futures

The Nifty 50 April futures (22,784) is up 0.21 per cent. Support is in the 22,700-22,670 region. Resistance is around 22,900.

Though an intraday dip to 22,700 cannot be ruled out, we expect the downside to be limited to 22,670. There is a good chance the contract will bounce back again from the 22,700-22,670 support zone and rise to 22,900 in the coming sessions. A strong break above 22,900 will then boost the bullish momentum and take the contract to 23,000 and higher.

The outlook will turn negative only if the Nifty 50 futures contract declines below 22,670. In that case, a fall to 22,600 and 22,500 is likely.

Trade Strategy

Traders with a high-risk appetite can go long on dips at 22,710 and 22,690. Keep the stop-loss at 22,640. Trail the stop-loss up to 22,730 as soon as the contract moves up to 22,770. Move the stop-loss further up to 22,810 when the contract touches 22,840. Exit the longs at 22,860.

Supports: 22,670, 22,600

Resistances: 22,900, 23,000