Nifty 50 began today’s session higher at 25,027 versus yesterday’s close of 24,971. However, it started falling after opening and is now at 24,810, down 0.6 per cent.
The advance/decline ratio of the benchmark index currently stands at 13/37, a bearish sign. Infosys, up 1.4 per cent each, is the top performer. Bajaj Auto is the top loser by slumping nearly 10 per cent.
Like the benchmark Nifty 50, the mid and the small cap indices are in the red, indicating a broad-based selling. Barring Nifty IT (up 0.5 per cent) all other sectors are down led by Nifty Auto and Realty, down 3.4 and 2.9 per cent respectively.
The Asian equity market gives a mixed signal. ASX 200 (8,340) and Hang Seng (20,460) have appreciated 0.7 and 0.9 per cent respectively whereas Nikkei 225 (38,970) and KOSPI (2,600) are down 0.6 and 0.2 per cent respectively.
Nifty 50 futures
The October futures of Nifty 50 began the session at 25,069 versus yesterday’s close of 25,048. It is now hovering around 24,900, down about 0.6 per cent.
It is currently testing a support at 24,900. A decisive breach of this level can drag the contract lower to 24,500 and 24,320 over the next few sessions.
On the other hand, a recovery on the back of 24,900 can lift Nifty futures to 25,200, a resistance. Subsequent resistance is at 25,500. Only a clear breakout of 25,500 can turn the outlook positive. Until then, the bearish bias will persist.
Trading strategy
Short Nifty futures now at 24,900 and short more on a rally to 24,980. Place initial stop-loss at 25,200.
When the contract falls to 24,700, revise the stop-loss to 24,950. Tighten the stop-loss further to 24,700 when the price falls to 24,500. Book profits at 24,400.
Note that the above trade can be carried to forthcoming sessions until either of target or stop-loss is triggered.
Supports: 24,500 and 24,320
Resistance: 25,200 and 25,500