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The sell-off in global equities continues to weigh on Indian benchmark indices. The Nifty 50 has fallen further and is now trading at 22,200, down 0.33 per cent. The advance-decline ratio is at 17:33, showing weakness. Unless the ratio improves in favour of advances, the index is likely to remain under pressure.
Nifty 50 outlook
The index touched an intraday low of 22,104 and has since risen well. However, resistance is around 22,260, which is likely to be tested during the day. We expect the Nifty to reverse lower again from around 22,260 to 22,100 and even 22,000.
This fall can be negated only if the Nifty breaks above 22,260 decisively, which can push it up to 22,400 and beyond.
Global indices
The US markets continue to fall. That, in turn, is keeping Asian markets under pressure.
It’s a sea of red in Asian markets with all major indices tumbling more than one per cent for the day. Nikkei 225 (38,397) and Kospi (2,606) are down more than 2 per cent each. Hang Seng (16,279) and Shanghai Composite (3,014) are down over a per cent each.
The Dow Jones Industrial Average (37,735) has declined further, in line with our expectation. The outlook remains bearish. The Dow Jones can fall to 37,200-37,000 this week.
Nifty 50 Futures
The Nifty 50 April Futures (22,214) is down 0.65 per cent. The outlook is bearish. Immediate resistance is at 22,250, which is in place now. We can expect the contract to fall to 22,100 and even 22,000 in the coming session.
A sustained rise above 22,250 is needed to move further up to 22,350 and ease the downside pressure.
Trade strategy
Traders can go short now. Accumulate on a rise at 22,245. Keep a stop-loss at 22,290. Trail the stop-loss down to 22,190 as soon as the contract falls to 22,140. Move the stop-loss down to 22,110 when the contract touches 22,070. Exit the shorts at 22,050.
Supports: 22,100, 22,000
Resistances: 22,250, 22,350
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