Nifty call: Sell on rallies with stop-loss at 15,850

Nifty 50 June Futures (15,780)

Despite the Asian markets giving mixed cues, the Indian benchmark indices opened the session in the green. The Nifty 50 and the Sensex are up by 0.15 and 0.25 per cent, respectively. Among the major Asian equity indices, the Nikkei 225 ended flat, the Hang Seng is up by 0.6 per cent and the DJ Shanghai is down by 0.7 per cent.

The market breadth of the Nifty 50 index indicates a bearish bias as the advance-decline is at 16-32. The mid-cap and the small-cap indices, which opened in the green like the benchmark indices, have now slipped below yesterday’s closing level. Among the sectoral indices, except the Nifty IT index, up by 1.5 per cent, all other indices are in the red led by the Nifty PSU bank index and the Nifty realty index, down by 1 and 0.9 per cent, respectively.

Futures: Following the underlying Nifty 50 index, the futures contract (June expiry) opened with a gap-up at 15,809 against Friday’s close of 15,751. But after marking an intraday high of 15,855, the contract declined and has now breached the support of 15,800 and is hovering at 15,780. Thus, the contract can be expected to trade with a bearish bias for the rest of the day and hence, traders can initiate fresh short positions with stop-loss at 15,850. While the nearest support is 15,750, a breach of this level can drag the contract to 15,700.

Strategy: Sell on rallies with stop-loss at 15,850

Supports: 15,750 and 15,700

Resistances: 15,800 and 15,850