Nifty call: Go short with stop-loss at 10,940

Nifty 50 January Futures (10,910)

The Nifty 50 futures contract has been struggling to gain momentum over the last few days. The contract has been facing strong resistance around 10,970. Though this hurdle was tested several times in the last few days, the contract has failed to breach it. This leaves the bias negative over the short term.

Intermediate resistance is at 10,935. The resistance at 10,970 can be revisited if the contract breaks this hurdle.

But, as long as the contract trades below 10,935, there is a strong likelihood of it falling to 10,875 or 10,865 in the near term. A further break below 10,865 will then drag the index futures lower to 10,840 or even lower thereafter.

High risk appetite traders can go short at current levels and also accumulate at 10,920. Stop-loss can be placed at 10,940 for the target of 10,865. Revise the stop-loss lower to 10,895 as soon as the contract moves down to 10,880.

Strategy: Go short at current levels and at 10,920 with a stop-loss at 10,940

Supports: 10,900, 10,865

Resistances: 10,935, 10,970

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