Nifty 50 September futures (20,038)

The Nifty 50 and Sensex are trading flat. The Sensex is trading at 67,201 and Nifty at 19,990. The advances/ declines ratio for Nifty at 24:26 indicates a mixed outlook. Even on the charts, the immediate outlook is a little unclear.

Nifty has support at 19,950-19,900 and then at 19,850-19,800. Unless a decisive fall below 19,800 is seen, there is no threat of a trend reversal. Resistance is seen around 20,050. A strong break above it can take the Nifty up to 20,150-20,200.

Global indices

All the major Asian indices are in the red. Nikkei 225 (32,693), Kospi (2,533), Hang Seng (17,988) and Shanghai Composite (3,109) are all down in the range of 0.15-0.85 per cent.

In the US, the Dow Jones Industrial Average (34,645.99, down 0.05 per cent) has been struggling to rise over the last couple of days. Price action indicates that the index lacks fresh buyers to take it sharply higher. That throws up chances of the index falling to 34,400-34,200 again. The Dow Jones will have to rise past 34,700 to negate the above-mentioned fall.

Nifty 50 futures

The Nifty 50 September futures (20,038) is down about 0.04 per cent. The contract has support at 20,000 and 19,970. As long as it trades above these supports, there is no danger of a sharp fall. As such, we see a good chance for the contract to rise back to 20,100-20,150 during the day. Broadly, 19,970-20,150 can be the trading range. The bias is positive for a break above 20,150, and a rise to 20,200 and higher eventually.

The outlook will turn negative only if the contract declines below 19,970. In that case, a fall to 19,900 and lower could be seen.

Trade strategy

Traders can go long on dips at 20,010 and 19,990. Keep the stop-loss at 19,960. Trail the stop-loss up to 20,055 as soon as the contract moves up to 20,070. Move the stop-loss further up to 20,080 when the contract touches 20,095. Exit the long positions at 20,120.

Supports: 19,970, 19,900

Resistances: 20,100, 20,150.

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