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Nifty 50 October Futures (10,133)
The Nifty futures contract started the session on a positive note, with a gap-up open at 10,175 and extended its bullish momentum to mark an intra-day high of 10,226.
However, the contract began to experience selling pressure and profit-taking at higher levels and started to decline. The contract fell breaching its immediate support levels of 10,175 as well as 10,150 and recorded an intra-day low of 10,119.
Asian markets were displaying a mixed trend; the Nikkei 225 index was up 1.1 per cent or 239 points at 21,696, while Hang Seng index declined 158 points or 0.6 per cent to 28,329.
The underlying Nifty 50 index is also witnessing selling pressure at higher levels. The market breadth of the index is biased towards declines. As long as the contract trades below 10,175 levels, the near-term outlook can remain bearish.
Traders with a near-term perspective can make use of intra-day rallies to go short with a stop-loss at 10,175 levels. Resumption of the downmove can pull the contract down to 10,120 and then to 10,100.
An emphatic downward break of the key support level of 10,100 is required to strengthen the downmove and pull the contract down to 10,080 and 10,060 levels in the short term. Key resistances are at 10,150 and 10,175 levels. A strong rally beyond 10,175 can alter the bearish view and take the contract higher to 10,200 and 10,225 levels.
Strategy: Initiate shorts in rallies with a fixed stop-loss at 10,175.
Supports : 10,120 and 10,100
Resistances : 10,150 and 10,175
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