A negative response to a statement. This answer first acknowledges that he/she understands what the other party is saying but ultimately he/she disagrees. Its a firm hard-no type of response delivered with a diplomatic spin.
It typically precedes some sort of follow up statement that might provide some perspective on why the answer is no, or it may simply be an insult.
"Yeh nah. You're an idiot."
"Yeh nah. Futurama was in no way better than the Simpsons."
It is said of the situation where a person has the bad luck to make contact with his testicles against an undefined surface or object, intentioned or not.
Given the nature of the word, it is more appropriate to design cases where the interaction is made with a moving object, for example, a ball.
Although it is extremely painful for the victim, it tends to be considerably funny to people who witness it.
Today in the baseball game the pitcher took a nutshot; the baseball hit him in the nuts.
Man, I just watched the funniest nutshot video ever.