Equity markets across Asia seem to be facing downward pressure since morning. Yet the Indian equity benchmark indices opened with a gap-up. However, both the Nifty 50 and the Sensex gave up the gains and are trading flat for the day now. Nifty is at 17,825 and Sensex at 59,775. Among the major Asian indices, the Nikkei 225 is down by a little over 1 per cent and the Hang Seng has lost about 0.85 per cent.
The market breadth of the Nifty 50 is currently showing bearish bias as the advance-decline ratio stands at 19-31. Nevertheless, all mid- and small-cap indices are marginally up so far. Among the sectoral indices, the Nifty financial services index is the top gainer, up by nearly 0.8 per cent, followed by Nifty Bank, up by 0.6 per cent. On the other hand, Nifty Metal, down by 1.6 per cent, is the top loser, followed by Nifty Pharma, which is down by 0.9 per cent.
So, traders can short the contract at current levels and short more on rallies with stop-loss at 17,865. On the downside, it is likely to go below the nearest support at 17,745 and touch 17,700. A breakdown from this level means futures could be dragged to 17,630. Subsequent support is at 17,600.
Strategy: Sell on rallies with 17,865 as stop-loss
Supports: 17,745 and 17,700
Resistances: 17,800 and 17,865