Portfolio

Nifty 50 January Futures (18,255)

Akhil Nallamuthu | Updated on: Jan 13, 2022
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The price band of 18,250 – 18,300 can act as a resistance band

Despite the major Asian indices facing a decline, Indian benchmark indices opened with a gap-up. However, the Nifty 50 and the Sensex could not extend the rally and have given up the gains. Nifty at 18,210 and Sensex at 61,100 are now flat for the day.

Barring the ASX 200 (up by nearly 0.5 per cent) all other major Asian indices are down for the day – Nikkei 225 lost 0.9 per cent, Hang Seng is down by 0.2 per cent and KOSPI is trading lower by about 0.4 per cent.

While the Nifty is flat, the market breadth of the index is indicating a positive bias as the advance-decline ratio stands at 30-20. Interestingly, the Midcap 50 is flat like the benchmark whereas the Smallcap 50 has risen by nearly 0.8 per cent so far today. Among the sectoral indices, the Nifty Metal, up by 2.9 per cent, is the top gainer followed by the Nifty Healthcare, up by 1.5 per cent. On the other hand, the Nifty Realty is the top loser, down by nearly 0.9 per cent followed by the Nifty IT, down by 0.8 per cent.

Futures: The January futures of Nifty 50 began the session slightly higher at 18,266 versus yesterday’s close of 18,241. While the contract rallied and hit an intraday high of 18,303, it declined and is now trading around 18,250. The price band of 18,250 – 18,300 can act as a resistance band and the bulls can find it difficult to cross over this price area. The bearish sentiment across Asian also means, the equities are not having a good session today. Nevertheless, the recent trend in Nifty has been bullish, and the market breadth is showing positive inclination.

Considering the above factors, traders can now stay on the fence and initiate fresh longs only if the contract rallies past 18,300. In such case, stop-loss can be placed at 18,230. Above 18,300, the Nifty futures could rise to 18,400 and then possibly to 18,500. So, exit 50 per cent when the contract reaches 18,400 and revise the stop-loss to 18,300. Liquidate the remaining at 18,500.

Strategy: Initiate fresh longs only if Nifty futures decisively breaks 18,300; stop-loss at 18,230. When it rallies to 18,400, exit half the longs and revise stop-loss to 18,300. Exit the remaining at 18,500.

Supports: 18,230 and 18,200

Resistances: 18,300 and 18,400

Published on January 13, 2022

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