Nifty 50 and Sensex are trading flat. Broadly the sentiment is negative. So, any rise during the day is likely to get selling pressure at higher levels. As such, the benchmark indices are likely to fall further from here.

Nifty 50 (17,139) has room to test 17,000-16,850. The region between 17,000 and 16,850 is an important support zone. The chances of a bounce back from this support zone cannot be ruled out. As such the price action in the 17,000-16,850 support zone will need a close watch.

Global indices

It is a sea of red across the Asian markets. All major indices are in red. Nikkei 225 (27,234), down 2.16 per cent has been beaten down the most. Kospi (2,363),  Hang Seng (19,335) and Shanghai Composite (3,239) are all down in the range of 0.9-2 per cent.

In the US, the Dow Jones Industrial Average (31,819) was down 0.28 per cent on Monday. The outlook is bearish for the Dow Jones. The index can fall to 31,000. Thereafter a bounce back is possible.

Nifty 50 Futures

The Nifty 50 March Futures (17,174) is down 0.18 per cent. It rose to a high of 17,278 and has come-off sharply from there erasing all the gains. It can fall to 17,100 during the day.

The 17,110-17,100 is a strong intraday support. A strong bounce from there can take the Nifty 50 March Future contract up to 17,200 and higher levels. So, the price action around 17,100 will need a close watch.

In case of the contract declines below 17,100, the downmove can extend up to 17,000.

Trading strategy

Traders can go short now. Keep a stop-loss at 17,205. Trail the stop-loss down to 17,155 when the contract falls to 17,130. Move the stop-loss further down to 17,135 when the contract touches 17,120 on the downside. Exit the shorts at 17,110.

Supports: 17,100, 17,000

Resistances: 17,250, 17,350