Nifty Today–May 17, 2023: Testing a support

Nifty 50 (18,250) and Sensex (61,810) have begun the session on the backfoot as they have lost nearly 0.2 per cent in the first hour of trade. However, there are some considerable supports for both the indices.

While the benchmark indices are facing downward pressure, the mid- and small-cap indices have been trading in green so far.

Among the sectoral indices, Nifty PSU Bank is the top gainer, with a gain of 0.4 per cent, while Nifty IT, down by 0.6 per cent, is the top loser.

While the domestic market seems to be mixed, the Asian indices are sending out mixed signals.

While Nikkei 225 (30,080) and KOSPI (2,500) are up by 0.8 and 0.7 per cent, respectively, Hang Seng (19,880) and ASX 200 (7,200) have lost 0.5 per cent each.

Nifty 50 futures

The May futures of Nifty 50 index began today’s session slightly lower at 18,316 versus yesterday’s close of 18,328. At present, it is trading around 18,300 – a support.

The bears face some difficulty at the current levels as the contract has a support band between 18,270 and 18,300. There is a good chance for Nifty futures to bounce off this level. In such a case, we might see a rally to 18,380–18,400 range, which is a resistance band. A breakout of 18,400 can lift the contract to 18,500.

On the other hand, if bears gather enough momentum to drag the contract below 18,270, the sell-off can intensify, potentially leading to a fall to 18,120. However, 18,200 can act as a minor support.

Trading strategy

Traders with higher risk-appetite can go long on Nifty futures on the back of the support band of 18,270–18,300. In other words, buy now at around 18,300 and add more longs if the price dips to 18,270. Place stop-loss at 18,240. Book profits at 18,380.

Note that this is an intraday trade call. Exit the trade before the end of the session, irrespective of the Nifty’ futures’ position at that time.

Supports: 18,270 and 18,120

Resistances: 18,400 and 18,500