Nifty Call: Go short below 10,300 with stop-loss at 10,320

Nifty 50 October Futures (10,338)

The Nifty 50 futures contract is trading volatile. The index opened with a wide 100-point gap-up at 10,405 but failed to sustain higher. The contract fell-back sharply to make a low of 10,277 and has bounced higher from there again to the current levels of 10,338. The near-term outlook is mixed. The contract has been range bound between 10,245 and 10,400 over the last few days.

The price action today indicates that as long as the contract trades above 10,300, an upmove to 10,375 and 10,400 is possible in the coming sessions. A strong break above 10,400 will then boost the momentum and will take it further higher to 10,430 and 10,470 thereafter.

On the other hand, if the Nifty 50 futures contract declines decisively below 10,300, it can fall to 10,245. A break below 10,245 will then increase the likelihood of the fall extending to 10,200.

Traders can go short on a break below 10,300. Stop-loss can be placed at 10,320 for the target of 10,260. Revise the stop-loss lower to 10,285 as soon as the contract moves down to 10,270.

Strategy:  Go short on a break below 10,300 with a stop-loss at 10,320.

Supports:  10,300, 10,245

Resistances:  10,370, 10,400