Nifty call: Go long above 12,400 levels, with stop-loss at 12,390

Nifty 50 January futures (12,385)

After a negative open, the Sensex and Nifty recovered and entered positive territory. But witnessing selling pressure at higher levels, the key benchmark indices slipped into negative territory and turned choppy.

The Asian markets are trading marginally in the green, the Nikkei 225 advancing 0.45 per cent to 24,041 and the Hang Seng trading almost flat at 28,897 levels in today's trading session.

The Sensex and the Nifty are wavering between positive and negative territory. The market breadth of the Nifty is biased towards declines. The India VIX has jumped 1 per cent to 14.32 levels.

The Nifty mid- and small-cap indices have climbed 0.6 per cent and 0.3 per cent respectively. Selling pressure is witnessed in the Nifty Bank and Financial service sectors, which have fallen 0.6 per cent and 0.5 per cent respectively. On the other hand, the Nifty pharma sector is experiencing buying interest and has jumped 1.4 per cent.

The Nifty January month contract commenced the day with a gap-down open at 12,345 levels. After marking an intra-day low at 12,335, the contract recovered and marked an intra-day high at 12,407. The key resistance at around 12,400 is capping the upside for the contract.

The contract is range-bound between 12,370 and 12,400. A strong rally above 12,400 can bring back buying interest and take the contract higher to 12,425 and 12,450 levels. Traders with a short-term view can buy above 12,400, with a fixed stop-loss at 12,390. Key supports below 12,370 are at 12,350 and 12,335 levels.

Strategy: Go long above 12,400 levels, with a stop-loss at 12,390

Supports: 12,370 and 12,350

Resistances: 12,400 and 12,425