Nifty futures (20,650)

Nifty 50 opened this week with a considerable gap-up at 20,601.95 versus Friday’s close of 20,267.90. The index is now at 20,570, up nearly 1.5 per cent.

Substantiating the bullish inclination, the advance/decline ratio of Nifty 50 stands at 47/3. All mid- and small-cap indices too are in the green.

Besides, barring Nifty Media, down 0.6 per cent, all other sectoral indices are in the green. Nifty PSU bank and Nifty Bank, up 3 and 2.2 per cent respectively, are the top gainers.

The chart of Nifty 50 and Nifty futures are at record levels and the momentum favours the bulls. Expect more rally from the current level.

Nifty 50 futures

The December futures contract of Nifty 50 opened today’s session higher at 20,640 as against previous close of 20,375.15. It is currently trading at 20,650, up 1.4 per cent.

The 14-day ATR (average true range) is around 155 points and thus, Nifty futures might have already reached the potential upper band today.

If the contract extends the rally, the nearest potential resistance is at 20,700. Subsequent resistance is at 20,800.

On the other hand, if Nifty futures sees a corrective dip from here, the immediate support is at 20,550. A drop below this level is unlikely today.

Trading strategy

Buy Nifty futures for intraday at the current level of 20,650 and add longs in case the price dips to 20,550. Place stop-loss at 20,480.

When the contract moves above 20,725, modify the stop-loss to 20,680. On a rally to 20,750, tighten the stop-loss further to 20,700. Exit at 20,800.

Supports: 20,620 and 20,550

Resistance: 20,700 and 20,800