Nifty 50 February Futures (17,693)
Domestic benchmarks BSE Sensex and NSE Nifty 50 are trading sharply lower. The sharp fall in the US equity markets on Tuesday is dragging the Asian markets, including the markets in India.
BSE Sensex and NSE Nifty are down over 0.7 per cent each in early trade. Sensex is trading at 60,241, while Nifty is at 17,692.
Nifty has declined below the key level of 17,800. It looks vulnerable and may dip to 17,600-17,500. Intermediate support is around 17,650 and it needs a close watch. It is also important to see if the index is managing to get a recovery during the day or not.
Global indices
The Dow Jones Industrial Average (33,129.59) had tumbled 2 per cent on Tuesday. The 33,500-34,500 range has been broken on the downside. The index can now test 32,800-32,500 if it fails to see a bounce-back from around 33,000.
Nifty 50 Futures
The Nifty 50 February (17,693) contract is down 0.82 per cent. Strong resistance will be around 17,740. The contract can fall to 17,600-17,550. Thereafter, it will have to be seen if it can manage to bounce back or not.
The contract has to rise past 17,740 first and subsequently above 17,800 to ease the downside pressure.
Trading Strategy
Traders can go short at current levels and also accumulate at 17,730. Keep the stop-loss at 17,760. Trail the stop-loss down to 17,670 as soon as the contract falls to 17,640. Move the stop-loss further down to 17,630 when the contract touches 17,610. Exit the shorts at 17,580.
Supports: 17,600, 17,550
Resistances: 17,740, 17,800