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Nifty 50 May Futures (9,100)
The Indian benchmark indices have been trading lower since morning today, after opening with a gap-down. The Nifty spot and Sensex spot indices are down by about 1.5 per cent each.
Most of the major Asian indices, except the Nikkei index, which is up by 0.2 per cent, are trading with a bearish bias. The Hang Seng and Shanghai composite indices are down by 1.6 per cent and 0.5 per cent, respectively.
The market breadth of the Nifty 50 index shows a downward bias as the advances-declines ratio is now at 13-37. All the small-cap and mid-cap indices are in the red. The Nifty IT index is the sole sectoral index that has gained today; it is up by about 0.8 per cent. Among the others, the Nifty bank index and the Nifty private bank index are the top losers, down by 2.6 per cent each. Volatility remains flat despite broad-based selling which is a positive sign. India VIX – the volatility index, is at 38 levels.
The May futures contract of the Nifty index opened lower at 9,138 versus yesterday’s closing price of 9,225. It has been moving down since the session open and after making an intra-day low of 9,037, the contract has recovered and is currently trading around 9,100.
The contract has broken below the range of 9,150 and 9,420, opening the door for a further weakening. Moreover, the contract price has slipped below the 21-day moving average, adding to the bearishness. Considering these factors, traders can be bearish for intra-day and initiate fresh short positions on rallies, with stop-loss at 9,200.
Strategy: Initiate fresh short positions on rallies with stop-loss at 9,200
Supports: 9,000 and 8,940
Resistances: 9,150 and 9,200
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