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Nifty 50 (18,610) and Sensex (62,830) appear muted as they are now trading around yesterday’s closing level. That said, the equity market across Asia is exhibiting a bullish sentiment as the major indices are in the green – Nikkei 225 (32,420), Hang Seng (19,210) and KOSPI (2,615) have gained around 0.5 per cent each so far today.
Despite this, the domestic market, in the first hour of trade, is struggling to find direction. Nevertheless, there are positive signs. The advance/decline ratio of Nifty 50 is 33/16 and the mid- and small-cap indices are up until now. So, there is a good chance for Nifty 50 to gather momentum as we go into the day.
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Among the sectors, Nifty Realty, up by 0.8 per cent, is the top performer. At the other end of the spectrum, Nifty IT is the worst performer as it has lost 1.5 per cent.
Yet, the overall bullish bias in Nifty 50 cannot be ignored.
Nifty 50 futures
The June expiry futures of Nifty 50 began the session slightly lower at 18,675 versus yesterday’s close of 18,697. It marked a high of 18,700 and is now hovering around 18,670.
Looking at the price action, the contract looks to be stuck between 18,650 and 18,725. So, only a breach of either of these levels can help forecast the next leg of trend.
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A breakout of 18,725 can lift the contract to 18,800 or even to 18,900. On the other hand, if the support at 18,650 is breached, we might most probably see a downswing to 18,575. Subsequent support is at 18,500.
Trading strategy
Considering that Nifty futures is trading between two key levels of 18,650 and 18,725, taking intraday trades at this juncture may not be prudent.
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Therefore, stay on the fence and initiate positions along the direction of the break of the range 18,650-18,725.
Supports: 18,650 and 18,575
Resistance: 18,725 and 18,800
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