Nifty 50 May Futures (10,535)

After a flat start, the benchmark indices -- the Nifty and the Sensex have decisively entered the negative territory. The Asian markets are showing mixed signs. In Japan, the Nikkei 225 index is up 72 points to 23,002 while the Topix index is down by 2 points to 1,813 levels. Hang Seng index has surged 257 points or 0.8 per cent to 31,305 levels.

The Nifty futures began the session with a gap-up open at 10,630. But it started to decline witnessing selling pressure and breached a key support at 10,600 levels and marked an intra-day low at 10,524. The advance-decline ratio of the Nifty index is biased towards declines.

On the other hand, the India VIX is up 1.7 per cent to 14.4 levels. The near-term outlook is bearish for the contract.

The Nifty futures can extend its down and test supports at 10,520 and 10,500 levels. Further decline below 10,500 can drag the contract down to 10,475 and 10,450 levels. Traders with a near-term view can sell the contract in rallies with a fixed stop-loss at 10,580 levels. Conversely, a strong rally above 10,600 is required to diminish the selling pressure and take the contract higher to 10,630 and 10,650 levels.

Strategy : Go short in rallies with a fixed stop-loss at 10,560

Supports : 10,520 and 10,500

Resistances : 10,580 and 10,600

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