Nifty 50 October Futures (19,450)

Nifty 50 and Sensex have begun the week on a weak note. The benchmark indices are down about 0.3 per cent each. Sensex is trading at 65,235 and Nifty at 19,485.

Nifty looks weak to test 19,400. But the price action thereafter will need close watch. A bounce from around 19,400 can take the index up to 19,600-19,700 again. But a break below 19,400 will be bearish. Such a break can drag the Nifty down to 19,100-19,000 this week.

Global indices

All major Asian indices are in the red. Nikkei 225 (31,008), Kospi (2,361), Hang Seng (17,172) and Shanghai Composite (2,959) are all down in the range of 0.6 to 0.8 per cent.

In the US, the Dow Jones Industrial Average (33,127) extended its fall as expected. It is heading down towards 33,000-32,850, in line with our expectation. The Dow Jones has a good chance to reverse higher from around 32,850.

Nifty 50 futures

The Nifty 50 October futures (19,450) is down 0.4 per cent. The outlook is bearish to see a fall to 19,400-19,350. The contract has to rise past 19,500 to negate the above-mentioned fall and rise towards 19,600 and higher.

Trade strategy

Traders can go short now. Accumulate shorts on a rise at 19,480. Keep the stop-loss at 19,520. Trail the stop-loss down to 19,430 as soon as the contract moves down to 19,405. Move the stop-loss further down to 19,390 when the contract touches 19,375. Exit the short positions at 19,360.

Supports: 19,400, 19,350

Resistances: 19,500, 19,600