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Nifty 50 futures contract opened with a wide 35-point gap-down at 10,468. However, the contract has managed to bounce from the day's low recovering all the losses. The index futures made a low of 10,460 and has reversed sharply higher to the current levels of 10,515.
A key intra-day resistance is at 10,545 which is likely to be tested in the coming sessions. Whether the contract manages to rise past this hurdle or not will determine the direction of the next move.
A strong break above 10,545 will ease the downside pressure. Such a break will take the Nifty 50 futures contract higher to 10,585. On the other hand, if the contract reverses lower from 10,545, a fall to 10,500 or 10,480 is possible. A further break below 10,480 will increase the downside pressure and will drag the index futures lower to 10,435 thereafter.
Traders can go short if the contract reverses lower from 10,545. Stop-loss can be placed at 10,570 for the target of 10,485. Revise the stop-loss lower to 10,525 as soon as the contract moves down to 10,515.
Strategy: Go short on a reversal from 10,545 with a stop-loss at 10,570
Supports: 10,480, 10,435
Resistances: 10,545, 10,585
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