Nifty 50 January Futures (14,422)

Tracking the weak Asian markets, the local equity indices- the Sensex and the Nifty 50 started the session in the negative territory and turned volatile in the initial hours.

Thereafter, the benchmark indices began to decline on the back of profit booking and selling interest. The Sensex and the Nifty 50 have declined 0.88 per cent and 0.89 per cent respectively.

The Nikkei 225 has slipped 0.44 per cent to 28,631 and Hang Seng index has plummeted 1.4 per cent to 29,508 levels in today’s session. The market breadth of the Nifty 50 is biased towards declines. India VIX has gained 1.5 per cent to 22.5 signifying increase in choppiness. Both the Nifty mid and small-cap indices have declined 1 per cent and 0.45 per cent, respectively. Only Nifty Auto and IT sectoral indices are hovering in the positive territory, gaining 2.8 per cent and 0.02 per cent, respectively. Top sectoral losers are Nifty metal and Nifty PVT Bank that has slumped 3.7 per cent and 2.4 per correspondingly.

The Nifty 50 January month contract started the session on the negative note, opening at 14,593 levels. After marking an intraday high at 14,625, the contract began to decline and has breached key supports at 14,600 and 14,500 levels. The contract has tumbled 1.2 per cent. The near-term outlook has turned bearish and will remain so as long as the contract trades below 14,550 levels.

Traders can sell on rallies with a stop-loss at 14,510 levels. The contract can test support at 14,400. A strong fall below this base can pull the contract down to 14,375 and then to 14,350 levels. Next key supports at 14,330 and 14,300. Resistances above 14,500 are at 14,525 and 14,550 levels.

Strategy: Sell on intraday rallies while maintaining a stop-loss at 14,510

Supports: 14,400 and 14,375

Resistances: 14,500 and 14,525

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