Nifty 50 (18,410) and Sensex (62,365), after the first hour of trade today, are flat. Nevertheless, both indices are trading above key support levels and the equity market sentiment appears positive today as indicated by the Asian market.

Among the major indices, Nikkei 225 (29,880), Hang Seng (20,065), and KOSPI (2,480) are up between 0.15 and 0.9 per cent.

The market breadth of the domestic market too shows a bullish inclination. For instance, the advance/decline ratio of Nifty 50 is at 38/12. Also, all the mid- and small-cap indices too are in the green.

Coming to the sectors, barring Nifty Financial services (down by 0.2 per cent) and Nifty Media (down by 0.7 per cent), all others are in the green. Nifty PSU Bank and Nifty Realty are the top gainers, up by 1 per cent each.

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Considering the above factors, the buying is broad-based and therefore, the probability of a rally is high.

Nifty 50 futures

The May futures of Nifty 50 index began today’s session slightly higher at 18,439 versus yesterday’s close of 18,418. It is now hovering around 18,440.

The chart is bullish, and the contract is expected to appreciate more from the current level. The nearest notable resistance levels are at 18,500 and 18,600.

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On the other hand, support levels below 18,400 are at 18,340 and 18,300.

Given that the overall bias is bullish, traders can consider fresh long positions now.

Trading strategy

Go long on Nifty futures now at 18,400. Add more longs if the price dips to 18,340. Place stop-loss at 18,290. When the contract touches 18,475, tighten the stop-loss to 18,420. Book profits at 18,500.

Supports: 18,400 and 18,340

Resistance: 18,500 and 18,600