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Nifty 50 and Sensex opened the day with a gap-up and are trading higher. The benchmark indices have recovered all the loss made on Monday and are up about 0.5 per cent each. Sensex is trading at 65,860 and Nifty is at 19,615. The price action on the chart keeps the bias positive and there is less danger of a sharp fall in the indices.
The support at 19,480 on the Nifty is holding well. Intraday support for Nifty is at 19,570. A test of 19,685 — a key intraday resistance — is likely. A break above 19,685 can boost the bullish momentum and take the index up to 19,750-19,800 in the coming sessions. That will turn the sentiment positive, with prospects for Nifty to revisit 20,000 levels.
Global indices
In Asia, the Shanghai Composite (3,081) is down 0.5 per cent while other major indices are in green. Nikkei 225 (31,742) has surged over 2 per cent and Hang Seng (17,744) is up over a per cent.
In the US, the Dow Jones Industrial Average (33,604.65) has closed well above the key intermediate resistance level of 33,500. This has eased the downside pressure. A further rise can take the Dow up to 34,000-34,300 this week.
Nifty 50 Futures
The Nifty 50 October Futures (19,666) is up 0.6 per cent. Immediate resistance is at 19,700. A break above it can take the contract up to 19,800 in the coming sessions. Support is in the 19,600-19,580 region.
The contract has to fall below 19,580 to become bearish, with the probability of falling. to 19,520-19,500 and below
Trade strategy
Traders can wait for dips and go long at 19,630 and 19,610. Keep the stop-loss at 19,570. Trail the stop-loss up to 19,650 as soon as the contract moves up to 19,675. Move the stop-loss further up to 19,690 when the contract touches 19,705. Exit the long positions at 19,735.
Supports: 19,580, 19,500
Resistances: 19,700, 19,800
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