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Nifty 50 December Futures (16,955)
The recovery move that was in place all through this week seems to have lost steam. The Sensex and Nifty 50 has turned lower today. Sensex is at 56,877, down 0.76 per cent. Nifty on the other hand is down 0.84 per cent and is trading at 16,930. Nifty made a high of 17,156 and has come-off from there. The first level of resistance at 17,200 mentioned yesterday is holding well for now. The fall below the psychological level of 17,000 has increased the chances of seeing more sell-off in the coming sessions. As such Nifty can fall to 16,500 levels again in the coming days. Sensex can test its support at 56,500 and a break below it can drag it to 56,000-55,000 next week.
In Asia, barring the Shanghai Composite (3,625, down 0.52 per cent) all other indices are trading in green. Nikkei 225 (28,815), Hang Seng (23,223) and Kospi (3.014) are up in the range of 0.1-0.6 per cent. In the US, the Dow Jones Industrial Average (35,950) was up 0.55 per cent yesterday. The US markets are closed today for Christmas.
Futures: The Nifty 50 (16,955) December Futures contract has declined below 17,000. The rise to 17,250-17,450 mentioned yesterday will now be difficult and may not happen. The broader downtrend seems to have resumed well in advance than expected. The broad 17,050-17,150 region will be a good resistance zone. Rallies to this resistance zone is likely to find fresh sellers coming into the market. Immediate support is at 16,870. A break below it can drag the contract down to 16,800 and even 16,600 in the coming sessions.
Traders can take positional shorts now and accumulate shorts on rallies at 17,040. Stop-loss can be placed at 17,170. Trail the stop-loss down to 16,930 as soon as the contract falls to 16,820. Move the stop-loss down to 16,790 as soon as the contract touches 16,680. Book profits at 16,620.
The contract will have to rise past 17,150 to bring back the chances of seeing 17,450 on the upside. But that looks less probable as seen from the charts.
Strategy: Go short now and accumulate shorts at 17,040. Keep the stop-loss at 17,170 for the target of 16,620. Trail the stop-loss down to 16,930 as soon as the contract falls to 16,820. Move the stop-loss down to 16,790 as soon as the contract touches 16,680.
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