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Nifty 50 and Sensex are witnessing some recovery today after having beaten down badly over the last two trading days. The benchmark indices opened with a gap-up and are up about 0.5 per cent each. Sensex is trading at 65,568 and Nifty 50 is at 19,528. It is important to see if the indices are getting a strong follow-through rise from here or not. Failure to do so will keep the Sensex and Nifty vulnerable to fall again.
Intraday support for the Nifty will be at 19,480 and 19,450. As long as the index sustains above this support, a rise to 19,600 can be seen during the day. Whether the index continues to rise past 19,600 or not will then decide the move thereafter.
A decisive break above 19,600 can take the Nifty up to 19,700-19,750. But a turn around from 19,600 can drag the index down to 19,500-19,450. That would continue to keep the Nifty under pressure to see more fall going forward.
Global indices
All major Asian indices are in green. Nikkei 225 (31,034), up 1.65 per cent is outperforming today. Kospi (2,424.33) and Hang Seng (17,326) are up about 0.8 per cent each.
In the US, the Dow Jones Industrial Average (33,129) was up 0.39 per cent. The index made a low of 32,873 and has risen back from there. Important support for the Dow Jones is at 32,800-32,700. If it manages to sustain above this support, a fresh leg of upmove is possible in the coming days. The price action in the next few days will be very important to watch.
Nifty Futures
The Nifty 50 October Futures (19,565) is up 0.5 per cent. Support for the contract is at 19,520 and 19,480. On the charts, the bias is bullish. The Nifty 50 October Futures contract can rise to 19,620 first. A break above 19,620 can take the contract up to 19,750.
The contract will come under pressure only if it declines below 19,480. In that case, a fall to 19,350 can be seen again.
Trade Strategy
Traders with high-risk appetite can go long on dips at 19,540. Keep the stop-loss at 19,490. Trail the stop-loss up to 19,560 when the contract moves up to 19,585. Move the stop-loss further up to 19,590 when the contract touches 19,605. Exit the long positions at 19,620.
Supports: 19,520, 19,480
Resistances: 19,620, 19,750
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