The sell-off in Nifty 50 and Sensex continued. The benchmark index came under pressure for a fourth straight day. The Sensex was trading at 66,054 points, down 0.26%, and the Nifty was trading at 19,674 points, down about 0.35%.
Nifty is more likely to test 19,600-19,500. The area near 19,500 points is an important support. Failure to rebound from this support will intensify selling pressure. In this scenario, Nifty may fall to 19,300-19,200. On the other hand, a rebound from 19,500 points could ease the rally to 19,700-19,800 points.
The picture in Asian markets is mixed. The Hang Seng Index (17,868) and the Shanghai Composite Index (3,108) rose by 1.2% and 0.77% respectively, while the Composite Index (2,507) and the Nikkei 225 Index (32,414) fell by 0.36% and 0.48% respectively.
In the United States, the Dow Jones Industrial Average (34,070) fell 1.08% on Thursday. The index has fallen below the key support level of 34,200 points. A drop to 33,800-33,700 now looks easy. Price action from here on out will need to be watched closely to see if the Dow is able to rebound.
Nifty 50 Futures
Nifty 50 September futures (19,730) contract fell 0.25%. The main resistance levels are 19,770 points and 19,820 points. As long as the contract trades below these resistance levels, the outlook will remain bearish. In the next few trading days, the price may drop to 19,650-19,600 points.
A strong break above 19,820 is needed to ease downward pressure and trigger another rise towards 19,900 and 20,000. But this seems less likely at present.
Traders can wait for an uptick. Short at 19,760 and 19,810. Stop loss remains at 19,840. Once the contract drops to 19,720, lower the stop loss to 19,740. When the contract hits 19,690 points downward, the stop loss is further lowered to 19,710 points. Exit shorts at 19,670.
support: 19,650, 19,600