Nifty 50 and Sensex are volatile today. Nifty opened with a wide gap-up at 20,110 but then has come down sharply giving back all the gains. The index is currently at 19,942, down 0.25 per cent.

Nifty has an important support in the 19,900-19,850 region. The chances are high for the index to sustain above this support zone and rise back again. Such a bounce can take the Nifty up to 20,000-20,100 again. The price action around 19,850 will need a close watch. A break below 19,850 can drag the index down to 19,800 and lower.

Global indices

In Asia, barring Kospi (2,540, down 0.66 per cent) other major indices are in green. Nikkei 225 (32,727) is up 0.8 per cent while Hang Seng (18,098) and Shanghai Composite (3,144) are up marginally by 0.01 and 0.04 per cent respectively.

In the US, the Dow Jones Industrial Average (34,663.72) is moving up slowing. It has to break the immediate resistance at 34,700 to gain momentum. Only in that case, the outlook will turn bullish convincingly and take the Dow Jones up to 35,000 and higher going forward. Else, the index can fall back to 34,400-34,200 and even lower.

Nifty 50 Futures

Nifty 50 September Futures (20,009) is down 0.15 per cent. Intraday support is in the 19,980-19,970 region. If the contract manages to sustain above this support zone, it can rise back to 20,100-20,150 in the coming sessions.

In case, a break below 19,970 happens, the downside can extend up to 19,920-19,900 for the day.

We prefer the contract to sustain above 19,980-19,970 and rise back.

Trade Strategy

Trades can go long now and accumulate at 19,985. Keep the stop-loss at 19,960. Trail the stop-loss up to 20,020 as soon as the contract moves up to 20,045. Move the stop-loss further up to 20,075 when the contract touches 20,095. Exit the long positions at 20,120.

Supports: 19,970, 19,900

Resistances: 20,050, 20,135