Nifty 50 (18,220) and Sensex (61,700) opened the session higher today following positive cues from the Asian market. However, the indices are finding it difficult to hold on to the gains as they have softened after the initial hour of trade.

Supporting the bullish bias, the market breadth is positive. For example, the advance/decline ratio stands at 30/20. Also, the mid- and small-cap indices are in the green.

Among the sectors, Nifty Metal, up by 0.8 per cent, is the top performer. On the other hand, Nifty Realty is the top loser today, down by 0.8 per cent.

Asian market: Major indices in Asia are in the green – Nikkei 225 (30,530), ASX 200 (7,235), Hang Seng (19,770), and KOSPI (2,510) have appreciated in the range of 0.5-1.4 per cent.

Nifty 50 futures

The May futures of the Nifty 50 index began today’s session with a gap-up at 18,290 versus Wednesday’s close of 18,225. Although it marked a high of 18,325 in the first hour of trade, it has softened to the current level of 18,260.

The contract could not sustain above the 18,300-level. As long as this resistance stays valid, the probability of Nifty futures ending today’s session with a gain will be lower.

If this level is taken out, the contract can rise quickly to 18,380. A breach of this level can lift it to 18,500. On the other hand, if there is a decline from here, Nifty futures can find its first support at 18,165. A break below this level can drag the contract to 18,100. 

That said, traders should be cautious today being the weekly expiry day. Because the contract might produce false breakouts, only to stay flat through the day.

Trading strategy

Even though the overall bias is bullish, the Nifty futures face a stiff resistance at 18,300. Hence, there is a strong chance for the contract to stay flat for the day. So, we do not recommend any intraday positions.

Supports: 18,165 and 18,100

Resistance: 18,380 and 18,500

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