The benchmark indices are trading in red as the sell-off in the global equities weighed on the domestic market. Sensex at 56,923 is down 0.75 per cent and Nifty at 17,052 is down 0.85 per cent. The outlook is negative. Sensex has support at 56,000 which can be tested in the coming sessions. A break below 56,000 will trigger a much steeper fall. Nifty on the other hand can fall to 16,800-16,700 on a break below 17,000.

Asian indices are trading mixed. Nikkei 225 (26,340, down 1.35 per cent) and Kospi (2,632, down 1.33 per cent) are trading in red while Shanghai Composite (2,897, up 0.38 per cent) and Hang Seng (19,952, up 0.09 per cent).

In the US, the Dow Jones Industrial Average (33,240, down 2.38 per cent) tumbled yesterday below the key 34,000 mark. It can now test 33,000-32,500 in the coming days.

Futures: The Nifty 50 April (17,053) futures contract had failed to sustain the break above 17,200 seen on Tuesday. The resistance will be in the 17,100-17,150 region. As long as the contract trades below this zone, the outlook will remain bearish with support at 16,950. A break below it, can drag the contract down to 16,800 in the next few days.

Traders can go short at current levels and accumulate shorts on rise at 17,090. Keep the stop-loss at 17,135 and trail it down to 16,990 as soon as the contract dips to 16,960. Move the stop-loss further down to 16,940 when the contract touches 16,905 and book profits at 16,870.

The contract will have to break above 17,150 and then a sustained rise past 17,200 in order to turn the outlook bullish.

Trading Strategy: Go short now and accumulate on a rise at 17,090. Keep the stop-loss at 17,130 for the target of 16,870. Trail the stop-loss down to 16,990 as soon as the contract dips to 16,960. Move the stop-loss further down to 16,940 when the contract touches 16,905.

Supports: 16,950 and 16,800

Resistances: 17,100 and 17,150