Nifty 50 (18,700) and Sensex (63,040) began the session with a gap-up. However, both indices gave up the early gains and are now trading near yesterday’s closing levels.

In Asia, Nikkei 225 (33,550) and ASX 200 (7,160) are up by 1.6 and 0.3 per cent, respectively, while Hang Seng (19,530) is trading flat. On the other hand, KOSPI (2,620) is down by 0.6 per cent.

Notably, the mid- and small-cap indices have gained marginally on the NSE.

Among the sectoral indices, Nifty Metal is the top gainer with a 1.5 per cent gain, while Nifty IT, down by 0.7 per cent, is the top loser.

Nifty 50 futures

Unlike the underlying Nifty 50, the June futures of the index opened with a gap-down at 18,750 against yesterday’s close of 18,777. After hitting a high of 18,810 in the first hour of trade, it has fallen back to 18,765.

The contract has its nearest support at 18,750, while it has its nearest resistance at 18,800. A clear breach of either of these levels could lend us a clue on the direction the contract could take for the rest of the day. There is possibility of Nifty futures staying between 18,750 and 18,800 during the day.

A breakout of 18,800 can potentially lift the contract to 18,900. On the other hand, a breach of 18,750 can drag it to 18,650 or even to 18,625.

Trading strategy

Stay on the fence and initiate trade along the direction of the contract in the the 18,750-18,800 range.

If Nifty futures breaks above 18,800, go long with stop-loss at 18,750 and look for a target of 18,900.

But if the contract slips below 18,750, consider short positions with stop-loss at 18,800. Target can be 18,650.

Note that the above recommendations are for intraday only.

Supports: 18,750 and 18,650

Resistances: 18,800 and 18,900

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