BL Research Bureau

Nifty 50 February Futures (12,085)

The Indian benchmark indices opened the session on a strong note. The Nifty spot and the Sensex spot indices have gained around 0.75 per cent each so far today. Among the major Asian indices, the Nikkei 225 has closed with a gain of nearly 0.9 per cent whereas the Hang Seng index has inched up by 0.3 per cent.

The market breadth of the Nifty 50 index is indicating a strong bullish bias as the advance-decline ratio is at 40-10. Also, all the mid-cap and small-cap indices are trading in the green today. Barring the Nifty auto index (down by 0.5 per cent), all other sectoral indices have gone up in today’s session. A drop in volatility can be observed, which can be conducive for the bulls. India VIX – the volatility index is down by 2.6 per cent to 14.1 levels.

The February futures contract of the Nifty index opened higher at 12,110 compared to yesterday’s close of 12,006. After registering an intra-day high of 12,128, it has slightly softened to 12,085. On the downside, the contract has its immediate support at 12,060. Until it stays above that level, the intra-day trend can be bullish. Moreover, the advance-decline ratio and other indices based on market-cap indicate a broad-based buying. Taking these factors into account, one can be bullish. But there is considerable resistance at 12,130. Hence, traders are recommended to initiate fresh long positions with a stop-loss at 12,060 if it breaks out of 12,130.

Strategy: Buy the contract above 12,130 with a stop-loss at 12,060

Supports: 12,060 and 12,000

Resistances: 12,130 and 12,200

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