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The Indian benchmark indices are trading under pressure. Sensex and Nifty 50 are down about 0.8 per cent each. Sensex is at 56,504 and Nifty is trading at 16,925. The indices are moving down towards the lower end of their respective range. 56,000-58,000 on the Sensex and 16,800-17,400 on the Nifty is the current range of trade. We expect the indices to break their respective range on the downside and see a fresh fall. Nifty can break below 16,800 and fall to 16,600 initially and then even more. Sensex can test 55,000-54,500 on a break below 56,000. The US Federal Reserve meeting outcome will be key to watch.
In Asia, the Japan and Chinese markets are closed today. Among the others, Hang Seng (20,796) is down 1.45 per cent and Kospi (2,675) is down 0.18 per cent today.
In the US, the Dow Jones Industrial Average (33,128, up 0.2 per cent) has risen back above the key level of 33,000. It will have to be seen if it can sustain above 33,000 and see a strong follow-through rise from here.
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Volatility expected ahead of Fed outcome, say analystsFutures: The Nifty 50 May (16,953) Futures contract is down 0.77 per cent. An immediate support is at 16,910. A break below it can drag the contract down to 16,870-16,850 in the near-term. It will also keep the contract under pressure to extend the fall up to 16,760 eventually.
Traders can go short on a break below 16,910. Keep the stop-loss at 16,960. Trail the stop-loss down to 16,870 as soon as the contract falls to 16,840. Move the stop-loss further down to 16,820 as soon as the contract touches 16,790. Book profits at 16,780.
In case if the contract manages bounce from 16,910, a rise back to 17,050 and 17,100 can be seen. The price action around 16,910 will need a close watch.
Trading Strategy: Go short on a break below 16,910 with a stop-loss at 16,960 and for the target of 16,780. Trail the stop-loss down to 16,870 as soon as the contract falls to 16,840. Move the stop-loss further down to 16,820 as soon as the contract touches 16,790.
Supports: 16,910 and 16,850
Resistances: 16,970 and 17,100
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