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Sensex and Nifty 50 have moved up higher. The bounce-back from Monday’s low is getting a follow-through rise. Sensex is up 0.85 per cent at 58,468. Nifty, on the other hand, is up 0.93 per cent at 17,472.
Though there is room for further rise, the broader picture remains weak. A fresh fall is likely in the coming days. Nifty has resistance at 17,545. If the current momentum continues, this resistance can be tested today. However, thereafter, it is highly likely the Nifty may drop again. The price action around 17,545 will need a close watch.
Global indices
Asian markets are trading mixed. Nikkei 225 (28,228) and Kospi (2,450) are up 1.25 and 0.96 per cent, respectively. Shanghai Composite (3,222) and Hang Seng (19,843) are down 0.57 and 0.9 per cent, respectively.
In the US, the Dow Jones Industrial Average (32,098.99, down 0.57 per cent) continues to fall. It looks weak to test 31,000 and even lower levels in the coming weeks.
Nifty futures
The Nifty 50 September Futures (17,531) is up 0.94 per cent. It has resistance at 17,570, which can be tested today. A break above 17,570 is needed to see an extended rise to 17,650. We expect the upside to be capped at 17,570 or 17,650. A reversal from either can again drag the contract down to 17,450-17,350 and even lower.
Traders with high-risk appetite can go short on a rise at 17,560. Stop-loss can be kept at 17,620. Trail the stop-loss down to 17,530 as soon as the contract falls to 17,490. Move the stop-loss further down to 17,480 as soon as the contract touches 17,440 on the downside. Book profits at 17,410
The overall bearish outlook will get negated only on a strong break above 17,650. But that is less probable.
Trading strategy: Go short on a rise at 17,560. Keep the stop-loss at 17,620 for the target of 17,410. Trail the stop-loss down to 17,530 as soon as the contract falls to 17,490. Move the stop-loss further down to 17,480 as soon as the contract touches 17,440 on the downside.
Supports: 17,440, 17,350
Resistances: 17,570, 17,650.
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