Nifty call: Buy on declines with stop loss at 12,160

BL Research Bureau

Nifty 50 December Futures (12,205)

The Indian benchmarks are trading marginally higher today, despite bearishness in major Asian indices. The Nifty spot and the Sensex spot index, both are trading higher by a quarter of a per cent. The Nikkei is down by 0.5 per cent whereas the Hang Seng is down by 0.2 per cent. But the US indices closed yesterday’s session with marginal gain.

The December futures contract of the Nifty 50 index opened on a positive note at 12,208 versus Tuesday’s close of 12,187. The contract has been moving up, and it has inched above a crucial level of 12,200.

The market breadth of the Nifty 50 index is indicating a bullish bias as 30 out of the 50 stocks are in the green. Among the sectoral indices, the Nifty metal index is the top performer, up by 0.8 per cent. In contrast the Nifty PSU bank index is the top loser, down by a little over 2 per cent today. The market is experiencing low volatility as indicated by India VIX (12.5 levels) – the volatility index. Lower volatility shows that the sentiment is in favour of the bulls.

The December futures of the Nifty 50 index registered an all-time high today at 12,217. The price action indicates a considerable bullish momentum as it currently trades above a potential resistance level of 12,200. So, traders can initiate long positions on declines with stop loss at 12,160.

Strategy: Buy on declines with stop loss at 12,160

Supports: 12,175 and 12,155

Resistances: 12,228 and 12,250