The Indian benchmark indices are under pressure. The sell-off in the global equities is weighing on the Indian indices. Both the Sensex and Nifty 50 are down sharply today by 1.45 and 1.62 per cent respectively. Sensex is at 57,260 and Nifty is at 17,050.

Nifty has declined below the key support level of 17,150. While this break sustains, a further fall to 16,700 is possible in the near-term.

Global indices

All the Asian major indices are in the red. Nikkei 225 (26,434), Shanghai Composite (3,083), Hang Seng (17,905) and Kospi (2,222) are all down in the range of 0.12-2.94 per cent today.

In the US, the Dow Jones Industrial Average (29,590, down -1.62 per cent) has declined and closed below 30,000 on Friday. There is room for it to test 28,900 before a corrective bounce is seen.

The weakness in the US equities is likely to keep the Sensex and Nifty subdued.

Nifty Futures

The Nifty 50 September Futures (17,046) is down 1.66 per cent. The outlook is bearish. It can fall to 16,750 from here in the coming sessions.

Resistances are at higher levels at 17,150 and 17,200. Any bounce from current levels can be capped at 17,150-17,200.

Traders can wait for a rise and go short at 17,110. Accumulate shorts at 17,170. Keep the stop-loss at 17,230. Trail the stop-loss down to 17,080 as soon as the contract falls to 17,010. Move the stop-loss further down to 16,980 when the contract touches 16,940 on the downside. Exit the shorts at 16,920.

The contract will have to rise past 17,200 to ease the downside pressure and avoid the above-mentioned fall. But that looks less likely immediately.

Trading Strategy: Go short on a rise at 17,110 and 17,170. Keep the stop-loss at 17,230 for the target of 16,920. Trail the stop-loss down to 17,080 as soon as the contract falls to 17,010. Move the stop-loss further down to 16,980 when the contract touches 16,940 on the downside.

Supports: 17,000, 16,750

Resistances: 17,150, 17,200

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