Nifty 50 August futures (10,022)
Taking bearish cues from the negative Asian markets, the Nifty futures contract started the session in the red. The Nikkei 225 has slipped 0.6 per cent to trade at 19,959 and the Hang Seng index has declined 0.5 per cent to 16,992 levels.
The Nifty August futures opened at 10,011 and fell to mark an intra-day low of 9,990. Thereafter, the contract began to experience some buying interest and started to recover to record an intraday high of 10,039.7. However, it is witnessing selling pressure at higher levels.
The contract is trading at a huge premium to its underlying Nifty 50 index, which has to be narrowed. Moreover, the Nifty 50 is experiencing selling pressure as well as profit-booking at higher levels and is down 0.5 per cent. The market breadth of the index is biased towards declines.
The near-term view for the contract is bearish. Traders with a short-term perspective can consider selling the contract on rallies with a fixed stop-loss at 10,035 levels. The contract can decline to test the support at 10,000. Further decline below this base can pull the contract down to 9,975 and 9,950 levels. Key resistances are at 10,035 and 10,050 levels.
Strategy: Go short on rallies while maintaining a fixed stop-loss at 10,035 levels.
Supports: 10,000 and 9,975
Resistances: 10,035 and 10,050