Nifty 50 August Futures (19,730)

Nifty 50 and Sensex are trading lower. Sensex is trading at 66,054, down 0.32 per cent. Nifty is at 19,612, down 0.25 per cent.

Nifty has been struggling to see a sustained break above 19,800. Failure to see a strong follow-through rise above 19,800 over the last couple of days keeps the index under pressure. This keeps the chances high for the Nifty to fall to 19,500 in upcoming sessions.

Global cues

Asian markets are trading mixed. Hang Seng (19,814) and Shanghai Composite (3,261) are up 0.9 and 1.4 per cent respectively. Nikkei 225 (32,316) has tumbled over 2 per cent while Kospi (2,591) is down 0.5 per cent.

In the US, the Dow Jones Industrial Average (35,282) declined sharply on Thursday. The resistance at 35,600 has been holding well. Failure to rise back immediately can drag the Dow Jones down to 34,800 and 34,500 in the coming days.

Nifty 50 Futures

The Nifty 50 August Futures (19,730) is currently down 0.4 per cent. Intraday support is at 19,700 and resistance is at 19,800. A breakout on either side will determine whether the contract can go up to 19,900 and higher or fall to 19,600-19,500.

Considering the chances of a fall in the underlying Nifty 50, we place a higher probability for the Nifty 50 August Futures contract to break 19,700 and fall to 19,600 and lower.

Trade strategy

Traders can go short on a break below 19,700. Keep the stop-loss at 19,725. Move the stop-loss down to 19,680 as soon as the contract falls to 19,660. Revise the stop-loss down to 19,645 when the contract touches 19,630. Exit the shorts at 19,610.

Supports: 19,700, 19,600

Resistance: 19,800, 19,900

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