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Nifty 50 and Sensex have begun the week on a positive note. Sensex is trading at 65,440, up 0.1 per cent and Nifty 50 at 19,465, up 0.15 per cent. The sharp bounce from the low on Friday is a positive for the indices. However, it is important for them to get a strong follow-through rise from here to mark the end of the correction and to turn bullish convincingly.
Nifty will have to surpass 19,500 to clear the way for a rise to 19,800-19,850 this week. Else, it can continue to oscillate between 19,200 and 19,500 for some more time. The index will come under pressure only if it breaks below 19,200. In that case a fall to 19,100-19,000 can be seen. But such a fall looks less probable as the index is getting strong support around 19,200. As such a break below 19,200 could be little difficult.
Global indices
Asian markets are all in green. Hang Seng (18,851) is up the most by 2.55 per cent. Shanghai Composite (3,168) is up over a per cent.
In the US, the Dow Jones Industrial Average (34,837.71) fell slightly on Friday. The index was down 0.15 per cent. The Dow Jones is currently facing resistance around 35,000. This leaves the chances high for a near-term short-lived corrective dip towards 34,500-34,400. But the thereafter the index can see a fresh rally that will have the potential to breach 35,000 and rise to 36,000-36,500 in the coming weeks.
Nifty 50 Futures
The Nifty 50 September Futures (19,530) is up about 0.1 per cent. The contract has come down from the high of 19,584. Support is around 19,500. A break below it can take the contract down to 19,450 and lower during the day.
If the contract manages to sustain above 19,500, it can oscillate between 19,500 and 19,600 for some time. A strong break above 19,600 will be bullish to see 19,700.
Preference will be to see the Nifty 50 September Futures contract to stay above 19,500 and breach 19,600 if not today itself but eventually going forward.
Trade Strategy
Traders with high-risk appetite can go long on dips at 19,510. Keep the stop-loss at 19,480. Trail the stop-loss up to 19,525 as soon as the contract moves up to 19,540. Move the stop-loss further up to 19,545 when the contract touches 19,560. Exit the long positions at 19,580.
Supports: 19,500, 19,450
Resistances: 19,600, 19,700.
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