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Taking cues from a weak trend in Asian markets, the Nifty futures started the session in the red, opening at 7,864.9. The contract recorded an intra-day high at 7,872 before it began experiencing selling pressure.
Breaching key support at 7,850, the contract fell sharply. However, it took support at around 7,800 and bounced back slightly. Overall, the outlook for the session is bearish.
The advance/decline ratio is biased towards declines in the Nifty basket. As long as the contract trades below the key resistance level of 7,850, the selling pressures will persist.
Traders with a short-term perspective can use rallies to go short while maintaining a stop-loss at 7,860 levels. The contract can decline to retest support at 7,800. Further fall below this level can pull the contract down to 7,770 and 7,750 levels in the near term.
On the other hand, a strong rally beyond 7,850 can lead to a corrective up move to 7,870-7,880 band. Only a conclusive breakthrough of this band can strengthen the bullish momentum and take the contract higher to 7,900 and 7,930 levels.
Strategy : Consider initiating fresh short position on rallies with a stop-loss at 7,860
Supports: 7,800 and 7,770
Resistances: 7,850 and 7,880
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