Nifty 50 August Futures (10,971)

The Sensex and the Nifty continued to decline after initial choppiness. After a negative opening, the key benchmark indices witnessed a rally which failed to sustain. The Sensex is down 0.25 per cent and the Nifty has declined 0.4 per cent.

The market breadth of the Nifty index is biased towards declines. The Nifty mid and small-cap indices have slumped 0.9 per cent and 1 per cent respectively. On the other hand, the volatility index - India VIX has gained 1.6 per cent to 16.8 levels.

Apart from the Nifty IT index which is hovering in the positive territory with marginal gains, other sectoral indices are featuring in the negative territory.

The Nifty August month contract began the session with a gap-down open at 11,013. Following an initial rally to mark an intra-day high of 11,039, the contract resumed the down-move. The contract breached the key support level of 11,000 and recorded an intra-low at 10,945 levels. The contract can witness selling pressure at higher levels.

Traders can make use of intra-day rallies to go short with a stop-loss at 11,010 levels. A strong fall below 10,950 can pull the contract down to 10,925 and 10,900 levels. On the upside, a strong rally above 11,050 can see a corrective rally to 11,075 and 11,100 levels.

Strategy: Go short in rallies with a stop-loss at 11,010 levels

Supports: 10,950 and 10,925

Resistances: 11,000 and 11,028

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