Nifty 50 has recovered well from its intraday low of 22,483. The price action since last week indicates the index is finding strong buyers at lower levels. This is positive for the Nifty. The index is currently trading at 22,559, up 0.13 per cent. The advances-declines ratio is at 25:25. This indicates indecisiveness in the market.

Nifty 50 outlook

Nifty has resistance in the 22,580-22,600 region. Supports are in the 22,470-22,400 region. So, 22,400 to 22,600 can be the broad trading range for the day. Within this the bias is positive. So, we can expect the Nifty to breach 22,600 and rise to 22,700-22,800 in the coming sessions.

Nifty will come under selling pressure only if it declines below 22,400. If that happens, it can decline to 22,300 and lower. But that looks less likely.

Global indices

In Asia, Nikkei 225 (38,669) is down 0.7 per cent. Other major indices are in green. Kospi (2,729) and Hang Seng (19,254) are up 0.18 per cent each. Shanghai Composite is trading flat at 3,158.

In the US, the Dow Jones Industrial Average (39,872, up 0.17 per cent) moved up yesterday. It has to cross 40,000 to move higher. Else there is a danger of a corrective fall to 39,500. It is a wait-and-watch situation.

Nifty 50 May futures

The Nifty 50 May futures (22,611) is marginally up by 0.03 per cent. Intraday support is in the 22,570-22,500 region. The contract can rise to 22,730 as long as it stays above 22,500. A break above 22,730 will see an extended rise to 22,850.

The outlook will turn negative only if the Nifty 50 May futures contract declines below 22,500. That can drag the contract down to 22,400 and lower.

Trade strategy

Traders can wait for dips. Go long at 22,580 and 22,530. Keep the stop-loss at 22,480 initially. Trail the stop-loss up to 22,610 as soon as the contract moves upto 22,645. Move the stop-loss further up to 22,685 when the contract touches 22,705. Exit the longs at 22,720

Supports: 22,570, 22,500

Resistances: 22,730, 22,850