Nifty 50 October Futures (19,547)

Nifty 50 and Sensex are trading lower. The weakness in the global equity markets is continuing to weigh on the Indian benchmark indices. Both the indices are down a little over 0.2 per cent. Sensex is trading at 65,460, while Nifty is at 19,566.

Nifty is getting support around 19,500. A break below 19,500 can drag the index down to 19,400 and even to 19,350. On the other hand, if Nifty manages to sustain above 19,500, it can be in a range of 19,500-19,750 for some time. Broadly, it is a wait and watch situation for now.

Global indices

All major Asian indices are in red. Kospi (2,387) is down the most by 1.2 per cent. Hang Seng (17,225) and Shanghai Composite (2,997) are down 0.4 and 0.3 per cent, respectively. Nikkei 225 (31,422) is flat.

In the US, the Dow Jones Industrial Average (33,414) has come down further in line with our expectation. The outlook is bearish. The index can test 33,000-32,850 on the downside in the coming days.

Nifty 50 Futures

The Nifty 50 October Futures (19,547) is down 0.35 per cent. It has an important intraday support at 19,505. A break below it will increase the selling pressure. Such a break can drag it to 19,440 and even 19,370 in the coming sessions.

The contract will have to rise past 19,600 decisively to ease the downside pressure. That looks less likely.

Trade Strategy

Go short only on a break below 19,505. Keep the stop-loss at 19,530. Trail the stop-loss down to 19,485 as soon as the contract falls to 19,460. Move the stop-loss further down to 19,455 when the contract touches 19,440 on the downside. Exit the short positions at 19,420.

Supports: 19,505, 19,450

Resistances: 19,600, 19,670

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