Nifty 50 January Futures (21,711)

Nifty 50 is attempting to recover after having fallen over the last couple of days. The index fell to test 21,500 on Wednesday in line with our expectation. It opened with a gap-up today and is currently trading at 21,604, up 0.4 per cent.

It is important to see if the Nifty is getting a strong follow-through rise from here. Intraday support is at 21,550-21,530. Resistance is at 21,670. A strong break above 21,670 will ease the downside pressure. That will open the doors for the Nifty to move further up towards 21,750-21,800.

Global indices

All Asian major indices are in red. Hang Seng (16,564), Nikkei 225 (33,216), Kospi (2,580) and Shanghai Composite (2,941) are all down in the range of 0.6 to 1 per cent.

The Dow Jones Industrial Average (37,430) in the US had declined 0.76 per cent on Wednesday. The index has fallen below the intermediate support level of 37,500. This can keep the index under pressure in the near-term to see 37,000 on the downside.

Nifty 50 Futures

The Nifty 50 January Futures (21,711) is up 0.5 per cent. Immediate resistance is at 21,730. A strong break above it can take the contract up to 21,820-21,850 during the day.

Support is in the 21,600-21,570 region. The contract will come under pressure only if it breaks below 21,570. Such a break can drag the Nifty 50 January Futures contract down to 21,500 and lower.

Trade Strategy

Wait for a rise and go long only on a break above 21,730. Keep the stop-loss at 21,680. Trail the stop-loss up to 21,760 as soon as the contract moves up to 21,780. Move the stop-loss further up to 21,790 when the contract touches 21,810. Exit the long positions at 21,840.

Supports: 21,570, 21,500

Resistances: 21,730, 21,850

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