Technical Analysis

Nifty 50 December Futures (17,100): Short at current level

Akhil Nallamuthu | | Updated on: Dec 06, 2021
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Although 17,100 can offer some support, the contract will most like break below this level and touch 17,000 today

 

Most of the major Asian indices are trading weak today. While the ASX 200 is flat, the Nikkei 225 and the Hang Seng have lost 0.4 and 1.9 per cent, respectively.

The Indian benchmark indices, although opened marginally higher, have been on a decline. The Nifty 50, at 17,070, is down by 0.75 per cent whereas the Sensex, at 57,280, is down by 0.7 per cent.

The market breadth of the Nifty 50 index is indicating considerable bearish bias as the advance-decline ratio stands at 8-42. The mid- and small- cap indices are down between 0.1 and 0.6 per cent. Volatility, an indication of market fear, has gone up as shown by India VIX. It has gone up by 3.1 per cent to 19.

Futures: Like the underlying Nifty 50, the December futures of the index opened marginally higher at 17,247 versus Friday’s close of 17,239. But soon after making an intraday high of 17,255, the contract tumbled. Currently, it is hovering around 17,100 levels.

Since the Asian markets are bearish biased and the domestic market’s breadth is showing negative signs, the likelihood of further decline is high. Although 17,100 can offer some support, the contract will most like break below this level and touch 17,000 today. Subsequent support is at 16,900.

So, traders can short at current level of 17,100 and sell again if it rallies to 17,170. Place initial stop-loss at 17,220 and revise it down to 17,100 if the contract falls below 17,000. Exit the shorts at 16,900.

Strategy : Short at current level and at 17,170. Initial stop-loss at 17,220. Revise it down to 17,100 if contract falls below 17,000. Exit at 16,900

Supports : 17,000 and 16,900

Resistances: 17,170 and 17,200

Published on December 06, 2021

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