Although the Nifty 50 (16,965) and the Sensex (57,120) opened today’s session with a gap-up, both indices gave away the gains and are trading around yesterday’s closing price, effectively flat for the day.

However, the bias is bearish as both the indices have slipped below a trendline support and, the trend has been negative for the past month. So, further depreciation can be expected for intraday in both Nifty 50 and Sensex.

Substantiating the bearish inclination, the market breadth of the Nifty 50 i.e., the advance/decline ratio stands at 20-30. All the mid- and small-cap indices are in the red, losing between 0.3 and 0.7 per cent so far today.

Among the sectoral indices, the Nifty PSU is the top gainer, up by one-third of a per cent, while the Nifty Media is the top loser, down by 1.75 per cent.

Nifty 50 futures

The October futures of the Nifty 50 index opened today’s session at 17,011 versus yesterday’s close of 16,978. But it could sustain above the 17,000-level and has declined to 16,985. The price action is bearish after the contract slipped below the trendline support at 17,100 and is trading below the important 17,000-level as well.

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Therefore, we expect the contract to decline further today. Traders can consider going short for intraday.

From the current level of 16,985, the nearest support is at 16,940. But, this is less likely to hold where the contract is expected to touch 16,870. On the upside, a rally beyond 17,060 might not happen today.

Participants can plan their trade considering the above factors. Below is our suggestion for today.

Trading strategy

Short Nifty futures with stop-loss at 17,075 at the current level of 16,985. When the contract drops below 16,940, tighten the stop-loss to 17,020. Book profits when the contract touches 16,870.

Supports: 16,940 and 16,870

Resistances: 17,060 and 17,100

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