Nifty 50, the domestic benchmark index, began today’s session with a gap-up at 23,571 versus last week’s close of 23,466. It is now hovering around 23,550, up about 0.3 per cent at the end of the first hour of today’s session.

Substantiating the bullish bias, the advances/ declines ratio of the Nifty 50 stands at 36/14. Also, all mid- and small-cap indices are in the green. Among the sectors, Nifty Consumer Durables, up 1.3 per cent, is the top gainer, whereas Nifty Healthcare, down 0.7 per cent, is the top loser.

Note that key Asian equity indices, too, have been positive since morning. Among the major indices, Nikkei 225 (38,430), ASX 200 (7,770) and KOSPI (2,770) have advanced between 0.8 and 1 per cent.

Nifty 50 futures

The June futures of the Nifty 50 opened higher at 23,511, as against Friday’s close of 23,467. It is now trading at 23,580, up nearly 0.5 per cent.

The chart shows that Nifty futures has broken out of the 23,200-23,500 range and the odds for a further upside has gone up considerably.

On the upside, Nifty futures can touch 23,800 and 24,000 in a couple of sessions. On the other hand, if the contract falls, it can find support at 23,500 and 23,200.

Broadly, the outlook is bullish following the breakout and so, traders can prefer trades on the long side.

Trading strategy

Buy Nifty futures now at 23,580 and add longs if the price falls to 23,400. Place initial stop-loss at 23,200. When the contract touches 23,800, tighten the stop-loss to 23,600. Book profits at 24,000.

Supports: 23,500 and 23,200

Resistance: 23,800 and 24,000

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