Nifty 50 September Futures (19,687)

Nifty 50 and Sensex are witnessing a strong bounce. After rising from their intraday lows, the benchmarks gained 0.1 per cent each. Sensex is trading at 66,185, while is at 19,736.

The expected fall to 19,500 did not take place. In fact, Nifty has risen back sharply from the low of 19,554. It is now important for the Nifty to get a strong follow-through rise from here and move above 19,800. If the upmove takes place, then the index will witness the previous bullishness, with a possible revisit to the 20,000 levels in the coming days. As such the price action in the next few sessions is going to be very important for the Nifty.

Global indices

Asian markets are trading mixed. Kospi (2,465) and Shanghai Composite (3,111) are up about 0.1 per cent each. On the other hand, Nikkei 225 (31,782) and Hang Seng (17,429) are down sharply by over a per cent each.

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In the US, the Dow Jones Industrial Average (33,550) fell to test the 33,300 levels. The index made a low of 33,306 and has risen back from there. It will have to sustain this bounce and rise further to avoid the danger of declining further towards 33,000 and lower.

Nifty 50 Futures

The Nifty 50 September Futures is down 0.17 per cent and is trading at 19,687. It has good support at 19,650 and 19,600. Although an intraday fall to 19,650-19,600 cannot be ruled out, a fall below 19,600 looks less likely.

We expect the Nifty 50 September Futures contract will begin its northward journey from around 19,650 or from 19,600. If it happens, the bounce will have potential to take the contract up to 19,750 again.

The contract will come under pressure only if it breaks below 19,600. The fall to the above mentioned levels, will open the possibility of the contract falling to the 19,550-19,500 range.

Trade Strategy

Wait for dips. Go long at 19,630 and 19,610. Keep the stop-loss at 19,580. Trail the stop-loss up to 19,655 as soon as the contract moves up to 19,675. Move the stop-loss further up to 19,690 when the contract touches 19,710. Exit the long positions at 19,735.

Supports: 19,650, 19,600

Resistances: 19,750, 19,815