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The Nifty spot index, after gaining for two consecutive days, is facing selling pressure today. Similarly, the Sensex spot index too is on a decline in today's session. Both the benchmark indices are down by nearly half a per cent. Nikkei, one of the major Asian indices has fallen by more than 2 per cent, giving out negative cues.
The market breadth of the Nifty 50 index clearly hints at a bearish bias as the advance-decline ratio currently stands at 15-35. Among the sectoral indices, the Nifty pharma index is the top gainer, up by 0.5 per cent whereas the Nifty metal index is the top loser, down by 2.4 per cent. As indicated by India VIX – the volatility index, the market is witnessing increased volatility today. The index has gone up by around 7 per cent to 16.65 levels.
The January futures contract of the Nifty index opened lower today at 12,168 against its previous close of 12,271. The contract has thus slipped below the important level of 12,200, which will now act as a hurdle on the upside. The 50-day moving average coincides at that level, making it a significant resistance. Thus, the outlook for intraday is bearish and so traders can initiate short positions with stop-loss at 12,240.
Strategy: Short the contract on rallies with stop-loss at 12,240
Supports: 12,130 and 12,100
Resistances: 12,200 and 12,230
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