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Nifty 50 December futures (10,632)
Taking cues from the bearish global markets, the Sensex and the Nifty began the session on a negative note. The US markets tumbled almost 3 per cent on Monday and the Asian markets are trading mixed.
The Nikkei 225 has advanced 0.89 per cent to 19,327 levels amid volatility, while the Hang Seng index has declined by 0.4 per cent to 25,651 levels.
After declining more than 1 per cent, both the Sensex and the Nifty are in a recovery mode and have trimmed their intra-day losses to 0.45 per cent.
The December month Nifty futures contract began the session with a gap-down open at 10,637. After marking an intra-day high at 10,639, the contract continued to decline, breaking below the key support level of 10,600. But after recording an intra-day low at 10,536, the contract bounced back strongly, trimming its intra-day losses. The contract has moved back above 10,600 levels.
Traders can make use of intra-day dips to buy the contract, while maintaining a stop-loss at 10,590. The contract can extend the correction rally to 10,650 and then to 10,675 levels. The next key resistances are at 10,700 and 10,725 levels. Key supports below 10,600 are placed at 10,570 and 10,540 levels.
Strategy: Buy on intra-day dips while maintaining a stop-loss at 10,590 levels
Supports: 10,600 and 10,570
Resistances: 10,650 and 10,675
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