Nifty 50 is attempting to bounce back. The index is trading at 21,574, up 0.24 per cent. 

The support in the 21,450-21,400 region is holding well for now. Immediate resistance is at 21,600. A break above it can take the Nifty 50 index up to 21,700 and 21,800 in the coming sessions.

The index will come under more selling pressure if it declines below 21,400. In that case, the index can fall to 21,250 or even 21,100.

For now, 21,400-21,800 seems to be the trading range so far this week. We will have to wait for a breakout on either side of this range to get clarity on the next move.

Global indices

Most of the major Asian indices are in red. Hang Seng (15,544) is down over a per cent. Nikkei 225 (35,982), Kospi (2,495) and Shanghai Composite (2,819) are all down in the range of 0.15-35 per cent.

The Dow Jones Industrial Average (38,467) was up 0.35 per cent on Tuesday. The index has risen above the intermediate resistance at 38,400. The outlook is bullish. Dow Jones has potential to target 39,300 on the upside.

Nifty 50 Futures

The Nifty 50 February Futures (21,691) is up 0.28 per cent.  Support is at 21,560 which is holding very well at the moment. But it is important to see if this bounce is sustaining or not. Intermediate resistance is at 21,720. A break above it can take the Nifty 50 February Futures contract up to 21,850-21,900 in the coming sessions.

On the other hand, a break below 21,560 will be bearish. Such a break can drag the Nifty 50 February Futures contract down to 21,500 and 21,400.

Trade Strategy

Traders can go short on a break below 21,560. Keep the stop-loss at 21,610. Trail the stop-loss down to 21,525 when the contract falls to 21,510. Move the stop-loss further down to 21,480 when the contract touches 21,450 on the downside. Exit the shorts at 21,420.

Supports: 21,560, 21,400

Resistances: 21,720, 21,850

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