Technical Analysis

Nifty 50 December Futures (11,985)

Akhil Nallamuthu, BL Research Bureau | Updated on December 09, 2019 Published on December 09, 2019

The Indian benchmarks are trading marginally higher today, as the Nifty spot index and the Sensex spot index are up by quarter percent each. The Asian indices are not indicating a definitive trend as the Nikkei has has closed with 0.35 per cent gain whereas the Hang Seng is trading flat.

Unlike the Nifty spot index, which opened flat, the December futures contract of the Nifty 50 index opened much lower. However, the contract has been gaining since the open of the session and it has recouped all its losses.

The December futures opened at 11,855 against Friday’s closing level of 11,955. The contract is currently trading at 11,985, after registering an intraday high of 11,996. The market breadth of the Nifty 50 index is inclined towards bullish sentiment as 35 out of the 50 stocks have gained today i.e. the advance-decline ratio is at 35-15. While most of the sectoral indices are in the green, the gain is led by the Nifty auto index, up by 1.2 per cent. The Nifty FMCG index is the top loser, down by 0.6 per cent since morning.

While the advance-decline ratio and the sectoral indices indicate a positive sentiment, the volatility index i.e. India VIX, has shot up by nearly 7 per cent to 14.5 levels. As higher volatility is associated with bearish bias, one needs to be cautious about the sustainability of the uptrend.

Currently at 11,985, the futures contract is trading between two key levels of 11,975 and 12,000. Since the contract is exhibiting certain bearish indications, traders are recommended to initiate fresh long positions only above 12,000 with a tight stop-loss.

Strategy: Go long above 12,000 with a tight stop-loss.

Supports: 11,975 and 11,930

Resistances: 12,000 and 12,035

Published on December 09, 2019
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