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Nifty 50 June futures (10,789) The Nifty and the Sensex began the session in negative territory and turned volatile. The Asian markets are trading mixed; the Nikkei 225 has advanced 0.5 per cent to 22,851, while the Hang Seng index is down 0.13 per cent at 30,401 levels.
The market breadth of the Nifty 50 index is biased towards declines. The June month Nifty futures contract started the session in the red, opening at 10,798 levels. After marking an intra-day high of 10,837, the contract began its decline on witnessing selling pressure. The contract has slipped below the key support level of 10,800 and has recorded an intra-day low at 10,781 levels. It is once again trading at a discount to the underlying value of the Nifty index, showing signs of weakness.
The contract is moving in a broad sideways range between 10,780 and 10,820. Traders should tread with caution as long as the contract trades in this range. Consider initiating fresh short positions on a decisive fall below 10,780 levels with a fixed stop-loss. A strong fall below 10,780 can drag the contract down to 10,750 and 10,725 levels.
Key support below 10,725 is at 10,700. Conversely, if the contract manages to rally beyond 10,820 levels, it can move higher to 10,840 and 10,850 levels. Subsequent resistances are at 10,875 and 10,900 levels.
Strategy: Go short on a strong fall below 10,780
Supports: 10,780 and 10,750
Resistances: 10,820 and 10,840
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