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Nifty 50 April Futures (17,030)
The Indian benchmark indices have opened the week on a weak note. Both Sensex and Nifty opened with a wide gap down and are trading in red. The Sensex (56,814) is trasding down 0.67 per cent and Nifty (17,036) is down 0.79 per cent. Both Sensex and Nifty are now attempting to bounce from their lows. But, however, that could be short-lived as the broader picture remains weak. As such, the upside could be limited and fresh sellers are likely to emerge at higher levels. So, traders are advised to remain cautious and have a strategy to sell on rallies, rather than being on the buy side of the market.
All major Asian Indices are trading sharply lower. Nikkei 225 (26,584), Shanghai Composite (3,012), Hang Seng (20,104) and Kospi (2,665) are all down in the range of 1.4 to 2.6 per cent. Overall weakness in the global equities can keep the Indian indices under pressure.
Futures: The Nifty 50 April (17,030) opened with a wide gap down at 17,005 and fell to a low of 16,936. Though the contract has recovered from the day’s low, there are key resistances ahead capping the upside. Resistances are at 17,080 and 17,130. The support is at 16,940, a break below it can drag the contract down to 16,850-16,800 and even to 16,750 in the coming sessions.
Traders can go short at current levels and accumulate shorts at 17,070. Keep the stop-loss at 17,110. Trail the stop-loss down to 16,980 when the contract falls to 16,940 and move further down the stop-loss to 16,930 as soon as the contract touches 16,910. Book profits at 16,880.
The contract will have to break above 17,130 to ease the downside pressure and rise further. But such a break looks less likely as the contract can attract fresh sellers at higher levels.
Trading Strategy: Go short now and accumulate on a rise at 17,070. Keep the stop-loss at 17,110 for the target of 16,880. Trail the stop-loss down to 16,980 as soon as the contract falls to 16,940. Move the stop-loss further down to 16,930 as soon as the contract touches 16,910.
Supports: 16,940 and 16,840
Resistances: 17,080 and 17,130
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