The Indian market has opened in the green following positive cues from Asia. However, the gains are given up as the Nifty 50 (17,740) and the Sensex (59,850) retreated after a gap-up opening and are now trading almost flat compared to yesterdays’ close. But Monday’s session was short and both indices are considerably up compared to last week’s close.

Among the Asian majors, Nikkei 225 (27,295), Hang Seng (15,300), ASX 200 (6,792) and KOSPI (2,244) are up in the range of 0.4 – 1.3 per cent so far today. Therefore, the equity market is bullish today.

Looking at the Nifty 50’s market breadth, there is a positive bias as the advance/decline ratio now stands at 28/22. But the mid- and small-cap indices are marginally in the red, losing between 0.1 and 0.25 per cent.

Among the sectoral trade, the Nifty Metal is the top performer rising up to 1.5 per cent so far whereas the Nifty PSU Bank is the weakest index trading down by 0.55 per cent.

Nevertheless, the benchmark index is likely to gain further ground from here although there is a possibility of a minor drop from the current levels.

Nifty 50 futures

The October futures of the Nifty 50 index opened today’s session higher at 17,772 versus yesterday’s close of 17,732. It is currently trading at 17,750 and there are good chances for the contract to rally from here.

But there could be a decline to 17,680. Overall, we expect the Nifty futures to rally from the current level of 17,750 or after a dip to 17,680. We expect the contract to touch 18,000 in the next few sessions.

However, note that a breach of 17,680 means the decline could extend to 17,500.

Trading strategy

Go long on Nifty futures at the current level of 17,750. Add more longs in case there is a dip to 17,680. Place stop-loss at 17,615.

When the contract rallies past 17,800, shift the stop-loss to 17,680. Tighten the stop-loss further 17,780 when the price is above 17,900. Exit the longs at 18,000.

Supports: 17,680 and 17,500

Resistance: 17,880 and 18,000

Published on October 25, 2022