Tracking the mixed Asian markets, the domestic benchmark indices - the Sensex and the Nifty commenced the session marginally in negative territory and continue to trade in this zone. The Nikkei 225 was choppy and traded flat at around 21,139 and Hang Seng index has slipped 0.3 per cent to 28,419 levels. The market breadth of the Nifty index is biased towards declines.
The February month Nifty futures contract began the session in negative territory, with a gap-down open at 10,801. After marking an intra-day high at 10,803 the contract resumed its downtrend witnessing selling pressure at higher levels. The contract has registered an intra-day low at 10,755 levels. The near-term outlook will remain bearish as long as the contract trades below the key resistance level of 10,800.
Traders can make use of intra-day rallies to go short while maintaining a stop-loss at 10,805. The contract can test support in the band between 10,750 and 10,755. A strong fall below this level can drag the contract down to 10,730 and 10,700 levels. Key resistance above 10,800 are placed at 10,825 and 10,850 levels.
Strategy:Sell in rallies while maintaining a stop-loss at 10,805
Supports: 10,750 and 10,730
Resistances : 10,800 and 10,825
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