Indian benchmark indices — Nifty 50 (18,185) and Sensex (61,120) — began the week on a positive note by opening with a gap-up and rallying; they are up by nearly 0.5 per cent each.

The market breadth of Nifty 50 is showing a bullish inclination as the advance/decline ratio is at 33/17. All the mid- and small-cap indices are in the green and, barring a couple of sectors, the others are also in the green. Nifty Metal is the top gainer, up by about 2 per cent; on the other hand, Nifty Pharma is the top loser, down by 0.4 per cent.

Overall, market sentiment appears bullish today and the buying looks broad-based.

Nifty 50 futures

The January futures of the Nifty 50 index opened flat at 18,209 today. But it rallied soon and is currently at 18,255, up by 0.3 per cent.

If the contract rallies on the back of the bullish inclination, it is likely to face barriers at 18,340 and 18,450. But if it falls from here, it will find support at 18,200 and 18,100.

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For intraday, a decline below 18,100 is less likely as a rising trendline support coincides with it.

Trading strategy

Although the contract is likely to stay flat today, one can risk going long on the back of the support at 18,100.

Traders can go long at the current level of 18,255 and add more longs if the price corrects to 18,225. Place stop-loss at 18,185 at first. If the contract rallies to 18,300, tighten the stop-loss to 18,250. Exit the longs at 18,340.

Note that the above trade recommendations are for intraday. So, exit the positions by the end of the day if either target or stop-loss levels are not hit.

Supports: 18,200 and 18,100

Resistance: 18,340 and 18,450

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