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Nifty 50 March Futures (16,665)
Russia’s attack on Ukraine has jolted the global equity markets. The Indian benchmark indices have tumbled over 2.5 per cent today. The major indices are in Asia are down in the range of 1.4-3.1 per cent. In the US, the major indices had tumbled in the range of 1.4-2.6 per cent overnight.
Nifty 50 has declined below the critical support level of 16,800. It is currently trading at 16,630, down 2.5 per cent for the day. Nifty has room to test 16,450-16,400 now. Thereafter a corrective bounce is possible before a much steeper fall is seen. Sensex has declined below the key support level of 56,500. It is currently 55,77, down 2.5 per cent for the day. Sensex can now test 55,000 on the downside in the near term.
Futures: The Nifty 50 March Futures (16,665) is down 2.65 per cent. It has strong resistance in the 16,750-16,800 region, which can cap the upside in a strong bounce. While below 16,800, the contract can fall to 16,450-16,400 in the coming sessions.
Positional trades can be taken at the moment. Initiate fresh short positions with 30 per cent of the intended amount at current levels. Add another 40 per cent to the shorts at 16.720 and 30 per cent at 16,770. The average holding rate will be at 16,718. Keep the stop-loss at 16,860. Trail the stop-loss down to 16,620 as soon as the contract falls to 16,540. Move the stop-loss further down to 16,530 as soon as the contract touches 16,490. Exit the shorts at 16,460.
The contract will have to rise past 16,800 decisively in order to ease the downside pressure and move higher. But that looks less probable.
Trade Strategy:
1 Go short now (30 per cent) and at 16,720 (40 per cent), 16,770 (30 per cent). Keep the stop-loss at 16,860 for the target of 16,460.
2 Trail the stop-loss down to 16,620 as soon as the contract falls to 16,540.
3 Move the stop-loss further down to 16,530 as soon as the contract touches 16,490.
Supports: 16,500 and 17,400
Resistances: 16,750 and 16,800
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