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Sensex and Nifty 50 seems to lack a strong follow-through buying after recovering well on Monday. Nifty 50 has failed to break the psychological level of 18,000 and has come-off from the high if 18,010. It is currently trading at 17,935, up marginally by 0.03 per cent. Sensex on the other hand made an intraday high of 60,419 and has reversed lower from there. The index is currently trading flat at 60,140.
Nifty has strong resistance at 18,065 and 18,150 which are likely to cap the upside for now. Rallies to these resistances is more likely to get fresh sellers coming into the market. We can expect the Nifty to see a fresh fall to 17,600-17,500 in the coming days.
On the global front, the Dow Jones Industrial Average (35,913) is heading towards the crucial resistance level of 36,000. Inability to rise past 36,000 can trigger a fall to 34,500-34,000 in the coming days.
Major Asian indices are broadly trading in the red. Nikkei 225 (29,513) and Shanghai Composite (3,490) are down 0.45 per cent and 1.5 per cent respectively. Hang Seng (25,189) and Kospi (3,012) are up 0.2 per cent and 1 per cent respectively.
Futures: The Nifty 50 November Futures (17,960) is facing resistance near 18,040 and is trading stable below 18,000. Though the broader view is bearish, there is room for a rise to 18,200 before a fresh fall is seen. Positional traders can use such a rally to take short positions at 18,120. Accumulate shorts at 18,185. Keep the stop-loss at 18,265. Wait for a fall to 17,650. Trail the stop-loss down to 17,960 as soon as the contract falls to 17,880. Move the stop-loss further lower to 17,860 as soon as the contract moves down to 17,750. Book profits at 17,680.
The outlook will turn bullish again only if the contract breaks above 18,200 decisively. But such a break looks unlikely at the moment.
Strategy: Go short on rallies at 18,120 and accumulate at 18,185. Keep the stop-loss at 18,265. Trail the stop-loss down to 17,960 as soon as the contract falls to 17,880. Move the stop-loss further lower to 17,860 as soon as the contract moves down to 17,750. Book profits at 17,680.
Supports: 17,850 and 17,650
Resistances: 18,040 and 18,200