Nifty 50 (19,100) opened on the front foot. It began today’s session at 19,232.95 versus yesterday’s close of 19,140.90. However, the index made a U-turn soon after opening with a gap-up and it is now hovering around 19,100, down 0.25 per cent.

The Asian equity market is giving mixed cues. Among the major indices, Nikkei 225 (30,760) is up 0.2 per cent whereas ASX 200 (6,775) is flat. On the other hand, Hang Seng (17,050) and KOSPI (2,280) are down 2.3 and 1.4 per cent, respectively.

With this as background, the Indian equity benchmark has declined post a good beginning. Supporting the bearish bias, the advance/decline ratio of Nifty 50 stands at 18/32.

Among the sectors, Nifty Realty, up 1.1 per cent, is the top performer whereas Nifty Pharma, down 0.6 per cent, is the top loser.

Considering the price action on the daily chart, we can conclude that the bear trend remains valid and the up move could only be a corrective rally.

Nifty 50 futures

The November futures contract of Nifty 50 opened today’s session higher at 19,275 versus Monday’s close of 19,220.90. It has now fallen to 19,140 and thus lost 0.4 per cent so far today.

The chart shows that the contract fell off a resistance at 19,280 and it is now trading marginally below the support at 19,150. Hence, the probability of a fall is high.

The nearest support for Nifty futures is between 18,960 and 19,000. A breach of this can intensify the fall. Support below 19,000 is at 18,800.

On the other hand, if the contract rallies from the current level of 19,140, it might not cross 19,200. So, broadly, the trend is bearish and traders can go for bearish strategies.

Trading strategy

Short Nifty futures now at 19,140. Add shorts in case the price rises to 19,200. Place initial stop-loss at 19,250.

When the contract falls to 19,080, tighten the stop-loss to 19,150. Book profits at 19,000.

Supports: 19,000 and 18,960

Resistance: 19,200 and 19,250

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