Nifty 50 April Futures (21,890)

Nifty 50 opened with a wide gap-down taking cues from the sell-off in the Asian markets. News on explosions reported in Iran is weighing on the sentiment. Nifty fell to a low of 21,777 and is attempting to bounce back. It is currently trading at 21,890, down about 0.5 per cent. The advance/decline ratio is at 9:41. This is bearish.

Nifty 50 Outlook

The view is bearish. Resistance is around 21,950. If the bounce sustains, a test of 21,950 is likely during the day. However, we do not expect the Nifty to surpass that hurdle. As such a reversal from around 21,950 can drag the Nifty down to 21,800-21,700 during the day.

Global indices

All major Asian indices are in red. Nikkei 225 (37,167), down 2.4 per cent has been beaten down badly. Kospi (2,590) and Hang Seng (16,184) are down 1.6 and 1.2 per cent respectively. Shanghai Composite (3,062) is down 0.4 per cent.

Dow Jones Industrial Average (37,775) has been stuck in a narrow range below 38,000 over the last few days. The broader view remains bearish. Resistance is in the 38,000-38,100 region. We expect the Dow Jones to fall to 37,200-37,000 in the coming days.

Nifty 50 Futures

The Nifty 50 April Futures (21,890) contract is down 0.73 per cent.  The outlook is bearish. Resistance is around 21,930. We expect the contract to remain below this resistance. So, the Nifty 50 April Futures can fall to 21,750. A break below 21,750 can see the fall extending up to 21,600 in a day or two.

Trade Strategy

Traders can go short now at 21,890. Accumulate shorts at 21,930. Keep a stop-loss at 21,980. Trail the stop-loss down to 21,860 as soon as the contract falls to 21,810. Move the stop-loss further down to 21,805 when the contract touches 21,780. Exit the shorts at 21,750.

Supports: 21,750, 21,600

Resistance: 21,930, 22,000

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