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Nifty 50 Sep Futures (10,109)
The Nifty 50 futures contract, which was stuck in a narrow range between 10,140 and 10,190 since Monday, broke the range and dropped below 10,140 today.
The contract made a high of 10,175 initially and then reversed sharply lower to make a low of 10,072.65. Though the contract has managed to bounce from the day’s low, the sentiment is expected to remain negative.
The level of 10,140 will now serve as a strong support-turned-resistance. An intraday bounce to this level may find fresh selling interest coming into the market. A pull-back from this level can take the index futures lower to 10,100 and 10,075. A break below 10,075 will increase the likelihood of the fall extending to 10,050.
Short-term traders can make use of rallies to go short at 10,135. Stop-loss can be placed at 10,165 for the target of 10,085. Revise the stop-loss lower to 10,115 as soon as the contract moves down to 10,105.
The downside pressure will ease only if the contract breaks above 10,140 again. But such a break looks less probable at the moment.
Strategy : Go short on rallies at 10,135 with a stop-loss at 10,165
Supports: 10,075, 10,050
Resistances: 10,140, 10,190
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