The Indian benchmark indices began the week with a significant gap-down. Both Nifty 50 and Sensex declined post opening and are now at 17,150 and 57,100 down by 1.9 and 2.1 per cent, respectively.

In Asia, Nikkei 225 has lost 1.6 per cent and DJ Shanghai is down by nearly 0.8 per cent. KOSPI is trading flat whereas ASX 200 and Hang Seng are closed today.

The advance/decline ratio of the Nifty 50 is showing a bearish bias as it stands at 12/38. Like the benchmark indices, all the mid- and small-cap indices are in the red, losing by over 1 per cent each.

Barring the Nifty Metal (up by 0.1 per cent) all other sectoral indices are down.

The Nifty IT and Media, top losers, are down by 4.3 and 2.5 per cent, respectively. The above factors indicate a broad-based sell-off and that means, further drop today can be expected.

Futures: The April futures of the Nifty 50 index opened today’s session lower at 17,221 compared to last week’s close of 17,519. After marking an intraday low of 17,172 the contract is hovering around 17,200.

The 50-day moving average lies at around 17,200 which can act as a support. There are chances for the contract to bounce on the back of 17,200 but the rally might not go beyond 17,300. Eventually, it will resume the downtrend and could fall to 17,100 and then possibly to 17,000.

Given these factors, traders can short the contract now and on a rally to 17,300. Keep stop-loss at 17,385. When the futures decline to 17,100 book three-fourth of your positions and revise the stop-loss to 17,220. Exit the remaining at 17,000.

Strategy: Short the contract now, at around 17,200, and on a rally to 17,300. Keep stop-loss at 17,385. When the futures decline to 17,100 book three-fourth of your positions and revise the stop-loss to 17,220. Exit the remaining at 17,000.

Supports: 17,100 and 17,000

Resistances: 17,300 and 17,385

comment COMMENT NOW