Nifty call: Tread with caution and initiate fresh long position

Nifty September Futures (7,752)

The two-day market rally came to an end on weak global cues and profit-booking.

The Nifty futures contract began the session on a negative note with a gap down open at 7,735 levels. After slipping below the key support level of 7,700, the contract found a base at an intra-day low at 7,690.

It is on a recovery mode, gaining more than 60 points from its low. However, the contract faces key resistances ahead at 7,775 and 7,800 levels.

To strengthen the bullish momentum, the contract needs to decisively rally above 7,800 levels. Therefore, traders with a short-term view can tread with caution and initiate fresh long position with a fixed stop-loss.

A break above 7,800 levels can take the contract higher to 7,826 and then to 7,850 levels. On the other hand, a downward reversal from the key resistances can drag it lower. Key support levels are at 7,740 and then at 7,720 levels. Next supports below 7,720 are pegged at 7,700 and 7,675 levels.

Strategy: The Nifty futures is on a recovery mode. Tread with caution.

Supports: 7,740 and 7,720

Resistances: 7,775 and 7,800