Nifty call: Sell below 14,740 with stop-loss at 14,800

Nifty 50 April Futures (14,760)

The Indian benchmarks opened the day on the weak foot following negative cues from the Asian market. The Nifty 50 and the Sensex are now trading lower by 0.9 per cent and 1.1 per cent so far respectively, compared to yesterday’s closing price. Among the major Asian indices, the Nikkei 225 has lost 0.9 per cent, whereas the Hang Seng index is down by 0.7 per cent.

Nevertheless, the market breadth of the Nifty 50 is positive as the advance-decline ratio stands at 31-19. On the other hand, volatility has inched up as indicated by India VIX – the volatility index – which is up by 1.6 per cent to 20.70.

Although the benchmark indices are down, the mid-cap and small-cap indices have gone up between 0.1 per cent and 0.5 per cent so far. Among the sectoral indices, the PSU bank index is the top gainer, up by 2.6 per cent followed by the Nifty realty index, up by 1.2 per cent. The Nifty financial services index and the private bank index are the top losers, down by 1.8 and 1.6 per cent, respectively.

Futures: The April futures contract, like the underlying Nifty 50 index, opened the session with a gap-down at 14,871 versus yesterday’s close of 14,913. It declined in the first hour of trade and then started to move in a narrow range between 14,760 and 14,830. The contract is now trading in the support band of 14,740 and 14,760. Since the price action is bearish biased, traders can short the contract if the support at 14,740 is breached. Stop-loss can be at 14,800.

Strategy: Sell below 14,740 with stop-loss at 14,800.

Supports: 14,740 and 14,700

Resistances: 14,775 and 14,830

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