Sensex and Nifty 50 have begun the week on a weak note. Sensex is trading at 58,106 and is down 0.35%. Nifty is trading at 17,322 and is down 0.28 per cent. The Indian indices are down following the fall in the US markets on Friday and in the Asians early morning today.

The Dow Jones Industrial Average tumbled about 272 points on Friday to close the week below 35,000 at 34,607.72. The movement in the Dow this week could be crucial in determining the Indian indices. The Dow could be vulnerable to test 34,200-34,000 this week if it fails to rise back above 35,000. In such a scenario, Sensex and Nifty can witness a corrective fall this week.

Futures: The Nifty September Futures contract fell to a low of 17,264 and has bounced-back well from there. It is currently trading at 17,330. Resistance is at 17,370 which can cap the upside. The contract can reverse lower and fall to 17,300-17,250 again. As long as the contract trades below 17,370, the chances of it extending the downside to 17,220-17,200 cannot be ruled out.

Also read: How to manage risk on short calls

The bearish view will get negated if the Contract breaks above 17,370. In that case the Nifty Futures contract can extend the upside to 17,400 today.

Traders can go short now and add to the shorts at 17,355. Stop-loss can be placed at 17,390 for the target of 17,260. Trail stop-loss to 17,320 as soon as the market moves down to 17,290. Move the stop-loss further down to 17,305 as soon as the contract moves down to 17,275.

  • Strategy: Go short now and at 17,355 with a stop-loss at 17,390. Trail stop-loss to 17,320 as soon as the contract comes down to 17,290.
  • Supports: 17,300 and 17,250
  • Resistances: 17,370 and 17,400
Related Topics
comment COMMENT NOW