Nifty call: Sell on rallies with tight stop-loss at 10,655 levels

Nifty 50 January futures (10,631) The benchmark indices, the Nifty and Sensex started the session in positive territory with a gap-up open. But after trading in a sideways range for a prolonged period, the indices fell sharply into negative territory, experiencing selling pressure and profit-booking ahead of the weekend.

The Nifty futures contract also opened the session with a gap-up at 10,689. After recording an intra-day high of 10,694, the contract started to move sideways and eventually began to decline due to selling pressure. The contract fell sharply, breaching its immediate support at 10,650, to make an intraday low of 10,602.

The next key support at around 10,600 is currently providing base for the contract. But, a decisive fall below this level can pull the contract down to 10,575 and 10,550 levels. Vital resistances above 10,650 are at 10,675 and 10,694. The market breadth of the Nifty index is biased towards declines. Traders with a short-term view can make use of intra-day rallies to go short, with a stop-loss at 10,655 levels. The contract can re-test support at 10,600.

Strategy: Consider selling the contract in rallies with tight stop-loss at 10,655 levels.

Supports: 10,600 and 10,575

Resistances: 10,650 and 10,675

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