Nifty 50 September Futures (19,790)

The equity markets are under pressure. The fall in the Nifty 50 and Sensex are running into the third consecutive day. Both the indices are down about 0.75 per cent each. Sensex is trading at 66,268 and Nifty is at 19,756.

Nifty has declined below a key support level of 19,800. If this break sustains, it can tumble towards 19,500.

Global indices

It’s a sea of red across the Asian markets. Except Shanghai Composite (3,090, down 0.6 per cent) all other major indices are down over a per cent.

The US Federal Reserve left their policy rates unchanged at 5.25-5.5 per cent and also kept the doors open for one more rate hike this year.

However, the median fund rate forecast was revised higher from 4.6 per cent to 5.1 per cent. This means that a 100 basis points rate cut projected earlier is now toned down to just 50 basis points cut. It indicates that the Fed would retain the rates for a long time before deciding to cut rates.

The Dow Jones Industrial Average (34,440) fell 0.22 per cent. It has an important support around 34,200. If that is broken then the Dow Jones can fall to 34,000 and 33,800 going forward.

Nifty 50 Futures

The Nifty 50 September Futures (19,790) is down 0.9 per cent. Resistance is around 19,900-19,930. As long as the contract trades below this support, a further fall to 19,700-19,600 cannot be ruled out in the coming sessions.

Trade Strategy

Traders can go short now and accumulate on a rise at 19,830. Keep the stop-loss at 19,880. Trail the stop-loss down to 19,770 when the contract falls to 19,730. Move the stop-loss further down to 19,720 when the contract touches 19,690. Exit the short positions at 19,660.

Supports: 19,700, 19,600

Resistances: 19,930, 20,000