Nifty 50 and Sensex are trading lower. Sensex is trading at 65,595, down 0.38 per cent and Nifty at 19,513 is down 0.31 per cent. Failure to get a strong follow-through rise on Tuesday followed by a fall today leaves the bias negative. This keeps the chances high for the Sensex and Nifty to fall more in the coming days.
Nifty has failed to get a sustained rise above 19,600. It looks vulnerable for a fall to 19,400-19,300 this week.
Global indices
In Asia, barring Kospi (2,607) up 1.3 per cent, other major indices are in red. Nikkei 225 (32,183) is down 0.6 per cent while the Hang Seng (19,713) and Shanghai Composite (3,249) are down 0.06 and 0.36 per cent respectively.
In the US, the Dow Jones Industrial Average (35,314.49) was down 0.45 per cent on Tuesday. However, the intraday price action shows a sharp bounce from the low of 35,007.41. That indicates the presence of strong buyers around the psychological 35,000 mark on the Dow Jones. This keeps the chances high for the Dow Jones to break 35,600 and rise to 36,000 in the coming days.
The Dow Jones will come under pressure only if it declines below 35,000. In that case, a fall to 34,800 and even lower is possible.
Nifty 50 Futures
The Nifty 50 August Futures (19,551) is down 0.51 per cent. There is room to fall further from here. Support is at 19,480 which can be tested during the day. Thereafter the Nifty 50 August Futures contract can bounce back towards 19,600.
In case the contract declines below 19,480, the downside can extend up to 19,400.
Resistance is at 19,650. The contract has to rise past this hurdle to ease the downside pressure and rise to 19,750 and higher.
Trade Strategy
Traders can go short now and accumulate at 19,580. Keep the stop-loss at 19,605. Trail the stop-loss down to 19,565 as soon as the contract moves down to 19,540. Move the stop-loss further down to 19,525 when the contract touches 19,510. Exit the shorts at 19,485.
Supports: 19,480, 19,400
Resistances: 19,590, 19,650