Nifty Call: Make use of intra-day rallies to sell the contract with a fixed stop-loss at 10,515

Nifty 50 February futures (10,478)

Following a bounce back in Asian markets, the Indian stock market too started the day on a positive note with a gap-up opening. However, the rally failed to sustain with the US futures declining.

The Nikkei 225 and Hang Seng index are off from the day's high, witnessing selling pressure. Likewise, both the Nifty and Sensex have also come off from the day's high and have entered the negative territory.

The Nifty February futures started the session with a gap-up opening at 10,595. It subsequently recorded an intra-day high at 10,624. But the contract breached key supports at 10,550 and 10,500 levels while declining thereafter. It recorded an intra-day low at 10,473. The near-term outlook is bearish for the contract.

Traders can make use of intra-day rallies to sell the contract while maintaining a fixed stop-loss at 10,515. The contract has an immediate resistance at 10,500. After testing this barrier, the contract is likely to resume its down move.

In such a scenario, the contract can decline to 10,470. Further decline below this level can drag the contract down to 10,450. Next supports below 10,450 are placed at 10,425 and 10,400. Key resistances above 10,500 are placed at 10,525 and 10,550 levels.

Strategy: Make use of intra-day rallies to sell the contract with a fixed stop-loss at 10,515 levels

Supports: 10,470 and 10,450

Resistances:10,500 and 10,525

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