Nifty 50 October futures (19,636)

Nifty 50 and Sensex are holding on to their gains made on Thursday and have risen further. Both the indices are up about 0.3 per cent each. Sensex is trading at 65,807 and Nifty is at 19,604.

The Nifty can take a breather following its rise above the 19,600 level. If that sustains, a decisive close above 19,600 can ease the danger of a fall back. It will also slowly bring back the earlier bullishness. In that case, the Nifty may rise again towards 20,000 going forward.

Global indices

All the major Asian indices are in the green. The Hang Seng (17,526), up 1.81 per cent, is outperforming the others. Nikkei 225 (31,102) is up marginally, by 0.08 per cent, while Kospi (2,410) is up 0.3 per cent.

In the US, the Dow Jones Industrial Average (33,119) closed on a flat note on Thursday. It is managing to hold above 32,800. However, it will need a strong follow-through rise from here to avoid falling back.

The US jobs data release today evening will be very important to watch.

Nifty 50 Futures

The Nifty 50 October futures (19,636) is up 0.35 per cent now. On the intraday chart, an inverted head and shoulder bullish pattern is forming. The neckline support of this pattern is in the 19,620-19,600 region. So, as long as the contract remains above 19,600, the outlook is bullish.

The Nifty 50 October futures contract can rise to 19,750-19,780 in the coming sessions. This rise will be negated if the contract declines below 19,600. In that case, a fall to 19,550 is possible.

Trade Strategy

Traders can go long now. Accumulate on dips at 19,610. Keep the stop-loss at 19,580. Trail the stop-loss up to 19,655 when the contract moves up to 19,685. Move the stop-loss further up to 19,690 when the contract touches 19,705 on the upside. Exit the long positions at 19,720.

Supports: 19,600, 19,550

Resistances: 19,750, 19,800

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