Nifty call: Buy on dips with stop-loss at 10,335

Nifty 50 October futures (10,364)

Taking bearish cues from the Asian markets, the Sensex and the Nifty started the session on a negative note. The Nikkei 225 index has slipped 191 points or 0.8 per cent to 23,783 and the Hang Seng index has also slumped 250 points or 0.9 per cent to 26,322 levels.

The domestic benchmark indices opened the session with a gap-down and extended their decline. However, witnessing buying interest at lower levels, the indices bounced back into positive territory.

The market breadth of the Nifty index is marginally biased towards advances. The Nifty October futures contract began the session with a wide gap-down at 10,273 and continued to decline. However, after marking an intra-day low at 10,232, the contract bounced back due to short-covering and buying interest at lower levels.

The contract breached key resistances at 10,300 as well as 10,350 levels and recorded an intra-day high at 10,417. The near-term outlook will remain positive as long as the contract trades above 10,350 levels.

Traders can buy on dips with a fixed stop-loss at 10,335 levels. The contract can test resistances at 10,400 and 10,430. Key resistances above 10,430 are at 10,450 and 10,480 levels. On the other hand, a decline below 10,350 can find support at 10,325 or 10,300 levels. A strong plunge below 10,300 can bring back selling pressure and drag the contract down to 10,270 and 10,250 levels.

Strategy: Buy on dips while maintaining a stop-loss at 10,335

Supports: 10,350 and 10,325

Resistances: 10,400 and 10,430

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