BL Research Bureau

Nifty 50 January Futures (14,545)

Amid mixed Asian market, the Indian benchmark indices opened marginally lower in today’s session. But after an initial blip, the indices started to recover. Currently, the Nifty 50 index is up by 0.2 per cent whereas the Sensex is trading near last session's closing level.

In Asia, the indications are not consistent i.e., the Nikkei 225 is flat, the ASX 200 closed with a loss of 0.3 per cent and the Hang Seng is up by about 1 per cent.

The domestic market seems positive and the Nifty 50 index indicates a positive bias as the advance-decline ratio stands at 30-20. But note that the volatility up as shown by the volatility index – the India VIX. It is up by about 2.2 per cent to 22.9.

Similar to the benchmarks, the mid- and small-cap indices are in the green as well – they have gained between 0.4 per cent to 1.4 per cent today so far. Among the sectoral indices, the Nifty realty is the top gainer, up by 2.7 per cent, followed by the Nifty PSU bank index, up by 2.2 per cent. At the other end, the Nifty pharma has been the worst performer today, losing nearly one per cent followed by the Nifty FMCG index, down by 0.6 per cent.

The Nifty 50 futures (January expiry), like the Nifty 50 spot index, began the day on a marginally weaker note. That is, it opened at 14,478 versus yesterday’s close of 14,489. But after marking the day’s low at 14,454, the contract started to recover. It rallied past the important level of 14,500 and is currently trading around 14,550. The price action indicates that the rally is most likely to continue for the rest of today’s session.

Hence, traders can be optimistic and go long on declines with stop-loss at 14,480. On the upside, it can potentially rally to 14,600, above which it can touch 14,650.

Strategy: Buy on intraday declines with stop-loss at 14,480

Supports: 14,520 and 14,480

Resistances: 14,600 and 14,650

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