Nifty futures (19,700)

Nifty 50 (19,635) began today’s session with a significant gap-up, taking cues from the bullish Asian market. It opened at 19,651 versus Monday’s close of 19,444. It is up 1 per cent after the initial hour of trade.

Substantiating the positive inclination, the advances/declines ratio of the index stands at 44/6. All mid- and small-cap indices have followed suit and are up so far today. Moreover, all the sectors are in the green, indicating broad-based buying.

Among the sectors, Nifty Realty, up 2.8 per cent, and Nifty IT, up 2.3 per cent, are the top gainers.

Among the major Asian indices, Nikkei 225 (33,450), ASX 200 (7,100), Hang Seng (17,910), and KOSPI (2,485) are up between 1.4 and 2.8 per cent.

Overall, the bias is bullish and that raises the probability of a further rally in Nifty futures.

Nifty 50 futures

The November futures contract of Nifty 50 opened today’s session higher at 19,700 versus Monday’s close of 19,497. It is currently trading at 19,700, up 1 per cent.

The daily ATR (average true range) for Nifty futures is around 160 points. Thus, the potential upper band for today is 19,660. However, Nifty futures has already crossed this level and is now trading at 19,700.

Although there is more room for a further rally given the momentum across the equity market, the risk-reward for fresh longs at the current level is unfavourable. So, traders should wait for a decline and then go long. If there is no correction, prefer staying out.

From the current level of 19,700, the resistance is at 19,760 and 19,815. On the other hand, the support is at 19,650 and 19,530.

Trading strategy

Buy Nifty futures if it dips to 19,660. Target and stop-loss for this trade can be 19,760 and 19,615.

Supports: 19,650 and 19,530

Resistance: 19,760 and 19,815