Nifty 50 and Sensex have begun the week on a weak note. Sensex is trading at 65,413, down 0.63 per cent and Nifty at 19,502 is down 0.69 per cent. The overall sentiment continues to remain weak. As such the benchmark indices can fall further in the coming sessions.
Nifty can fall to 19,400. Thereafter the price action will need a close watch. A bounce from around 19,400 will give a breather. In that case, Nifty can see a bounce towards 19,600-19,700. But a break below 19,400 will intensify the selling pressure. Such a break can drag it towards 19,200-19,100.
Asian markets are trading lower. Nikkei 225 (31,280) and Hang Seng (17,278) are down sharply by 1.5 and 3 per cent respectively. Chinese markets are closed for this whole week on account of public holidays.
In the US, the Dow Jones Industrial Average (33,433) continues to move down. The index looks weak and can fall further towards 33,000 and even 32,800-32,700.
Nifty 50 Futures
The Nifty 50 October Futures (19,553) is down 0.8 per cent. The contract can test 19,500. The price action thereafter will need a close watch. A break below 19,500 will be bearish to see a fall towards 19,400 and even lower. On the other hand, a bounce from around 19,500 might have the potential to take the Nifty 50 October Futures contract up to 19,650-19,700.
As such the price action around 19,500 will need a close watch now to get a cue on the next move.
Considering the risk-reward ratio, we suggest traders to stay out of the market today. Watch the price action around 19,500 to see if the contract is sustaining above it or not. Then trades can be taken accordingly tomorrow.
Supports: 19,500, 19,400
Resistances: 19,600, 19,650