The Asian stocks began the session in deep red, taking cues from the negative US markets but have recovered smartly from the intra-day low. Both the Nikkei 225 and Hang Seng index have bounced up from their intra-day low and are trading almost on a flat note. The Dow Jones slumped 208 points or 0.8 per cent to 24,528 and S&P 500 has declined 20 points or 0.8 per cent to close at 2,643 in the previous session.
With the mixed global cues, the domestic bellwether indices - the Sensex and the Nifty -- started the session marginally in the negative territory and continued to trade in the negative zone. The Nifty January futures contract opened the session at 10,679. After recording an intra-day high at 10,694, the contract resumed its down-move. It has registered an intra-day low at 10,632.
Outlook for Nifty January Contract
The near-term outlook is bearish for the contract. Traders can make use of the intra-day rallies to initiate fresh short positions while maintaining a stop-loss at 10,680 levels.
A decisive fall below the key support level of 10,630 can drag the contract down to 10,610 and 10,600 levels. A further tumble below these supports can pull the index lower to 10,575 and 10,550 levels.
Key immediate resistances are at 10,680 and 10,700. A strong rally above 10,700 can take the contract higher to 10,725 and 10,750 levels which will be a corrective up-move.
Strategy: Near-term outlook is bearish. Sell in rallies with a fixed stop-loss at 10,680
Supports: 10,630 and 10,600
Resistances: 10,680 and 10,700