Nifty 50 August Futures (11,198)

The Sensex and the Nifty started the session on a flat note and immediately slipped into negative territory and continued to trend downwards. The Asian markets are hovering in the red, the Nikkei 225 has marginally declined by 0.2 per cent to 21,616 levels and Hang Seng index has tumbled 1.46 per cent to 27,982 levels in today's session. Both the Sensex and the Nifty has fallen over 1 per cent witnessing selling pressure. The market breadth of the Nifty index is biased towards declines. The India VIX has jumped 8.6 per cent to 13.17 levels. The Nifty mid- and small-cap indices have also slumped almost 1 per cent each.

Selling interest is seen in the Nifty Auto and Metal indices which have fallen 2.7 per cent and 2.4 per cent respectively. The Nifty August month futures began the session with a gap-down open at 11,310. After recording an intra-day high at 11,325 the contract resumed its down-move and continued to decline breaking below the key support at 11,300. The contract breached the next key support at 11,200 and has marked an intra-day low at 11,175. It tests a key support in the band between 11,175 and 11,200. The near-term outlook is bearish for the contract. Traders can make use of intra-day rallies with sell the contract with a fixed stop-loss at 11,260 levels. A strong fall below 11,175 can drag the contract down to 11,150 and 11,125 levels. On the upside, a decisive rally above 11,300 is needed to take the contract higher to 11,330 and 11,350 levels.

Strategy: Sell in rallies with a fixed stop-loss at 11,260 levels

Supports: 11,175 and 11,150

Resistances: 11,250 and 11,280