Nifty 50 January Futures (10,447)

After a positive gap-up open, the Nifty and Sensex started to decline witnessing selling pressure at higher levels. In the Asian markets, Hang Seng index gained 596 points or almost 2 per cent to 30,515.

The Nifty January futures contract also started the session with a gap-up open at 10,521 and recorded an intra-day high of 10,524. However, experiencing selling pressure at higher levels, the contract began to decline. While trending down, the contract has decisively breached a key support at 10,500 and recorded an intra-day low at 10,441.

The near-term outlook is bearish for the contract. Traders with a short-term perspective can make use of intra-day rallies to initiate short positions with a fixed stop-loss at 10,470 levels. The contract can retest the support at 10,440. A strong decline below this base level can pull the contract down to 10,420 and 10,400 levels.

Further plunge below 10,400 can find supports at 10,375 and 10,350 levels. On the other hand, key resistances are placed at 10,480 and 10,500. Key resistances above 10,500 are at 10,525 and 10,550 levels.

Strategy: Go short in rallies with a fixed stop-loss at 10,470 levels.

Supports: 10,440 and 10,420

Resistances: 10,480 and 10,500