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Nifty 50 May Futures (15,910)
The Indian equity benchmarks, although began the session on the front foot, were dragged by the bearish sentiment spilled over by the weakness across Asia. The Nifty 50 at 15,930 and the Sensex at 53,510 are down by 0.6 and 0.4 per cent, respectively so far. As it stands, the negative bias is set to stay and further decline can be expected as we go through the day.
In Asia, all the major indices like Nikkei 225, ASX 200, Hang Seng and KOSPI are down in the range of 0.2 – 0.65 per cent so far. This can also weigh on the Indian market.
The bearish bias is substantiated by the advance/decline ratio of the Nifty 50 index, which currently stands at 15-35. And all the mid- and small-cap indices are in the red, each losing over 1 per cent. Further, almost all the sectoral indices have lost today led by the Nifty Realty and the Nifty Oil & Gas, down by 1.9 and 1.7 per cent, respectively. The Nifty IT is the top gainer, up by 0.6 per cent.
The downside bias is evidend and the chances are high for more decline during r the rest of the day.
Futures: As the underlying Nifty 50 opened with a gap-up, the May futures opened higher at 16,091 compared to yesterday’s close of 16,014. It rallied and registered an intraday high of 16,123. However, unable to move upward, the contract made a U-turn and is now trading around 15,910, meaning it is down by 0.65 per cent for the day.
Since the contract has dipped below 16,000, the bears will eye a target of 15,740, the nearest notable support. A breach of this level can intensify the sell-off where the price could tumble to 15,500. A rally above 16,000 is less likely.
The market participants can consider initiating fresh short positions at the current level of 15,910. Add more shorts if the contract moves up to 16,000. Place the stop-loss at 16,100. Exit the shorts at 15,750.
Strategy: Short afresh at the current level of 15,910. Add more shorts if the contract moves up to 16,000. Place stop-loss at 16,100. Exit the shorts at 15,750.
Supports: 15,740 and 15,500
Resistances: 16,000 and 16,100
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