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Nifty 50 January Futures (7,610)
China dragged rest of the stock markets lower for the second time this week. As trading halted there following another 7 per cent decline in the CSI 300, both the Nifty and Sensex plunged sharply.
The Nifty futures opened the session with a gap-down at 7,678 levels. After marking an intra-day high at 7,687, the contract tumbled 2 per cent and recorded an intra-day low at 7,587 levels. However, the contract started to recover from there and has moved above 7,600 levels.
The short-term trend is bearish. The contract trades well below its 21 and 50-day moving averages. Indicators in the daily chart have entered the bearish zone.
Traders with a short-term view can make use of rallies to sell the contract while maintaining a stop-loss at 7,640. The contract can continue its decline and test supports at 7,570 and 7,550 levels. Next key support is at 7,500.
On the other hand, the key resistances are placed at 7,630 and 7,650 levels. Subsequent resistances above 7,650 are at 7,675 and 7,700. To alter the bearish outlook, the contract needs to emphatically rally above 7,750 levels.
Strategy : Sell the contract in rallies while maintaining a stop-loss at 7,640
Supports : 7,570 and 7,550
Resistances : 7,630 and 7,650
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