The sell-off in the Nifty 50 and Sensex continues. Both the indices are down about 0.55 per cent each today. Nifty is trading at 16,875 and Sensex at 57,240. The broader sentiment continues to remain negative.

Nifty has crucial support at 16,850. A break below it will accelerate the fall. Such a break can drag the index down to 16,600. In case the Nifty manages to bounce back from 16,850, a recovery rise to 17,100-17,200 can be seen again.

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Global indices

All major Asian indices are in red. Nikkei 225 (26,940), Shanghai Composite (3,247), Kospi (2,370) and Hang Seng (19,245) are all down in the range of 0.5-1.5 per cent.

In the US, the Dow Jones Industrial Average (31,874) continues to fall. The overall picture is bearish as long as it trades below 32,000. The Dow Jones can fall to 31,000 in the coming days. Thereafter a reversal is possible.

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Nifty 50 Futures

The Nifty 50 March Futures (16,960) is down 0.44 per cent. It has declined below the key support level of 17,020. The outlook is bearish. There is room for a fall up to 16,900-16,800 from here.

Resistances are at 17,020 and 17,100. A strong rise past 17,100 is needed for the Nifty 50 March contract to get a breather and rise. But considering the overall negative sentiment, a rise above 17,100 is less likely.

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Trading strategy

Go short on a rise at 17,010. Keep the stop-loss at 17,080. Trail the stop-loss down to 16,990 as soon as the contract falls to 16,960. Move the stop-loss further down to 16,930 when the contract touches 16,910. Exit the shorts at 16,870.

  • Supports: 16,900, 16,800.
  • Resistances: 17,020, 17,100.