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Nifty 50 February Futures (17,182)
Sensex and Nifty 50 are managing to sustain the strong bounce seen from their lows on Tuesday. Both the indices are up about 0.58 per cent each. Sensex is trading at 57,667 and Nifty is at 17,195. It is important to see if the indices are getting strong follow-through rise from here or not. Sensex will have to rise past 58,000 to see a further rise to 59,000. Nifty has to break above 17,300 to see levels of 17,400-17,500 on the upside.
In Asia, all the major indices are in green. Shanghai Composite (3,482), Hang Seng (23,643) and Kospi (2,719) are all up in the range of 0.45-0.75 per cent. Japan’s Nikkei 225 is closed today on account of a public holiday.
In the US, the Dow Jones Industrial Average (33,396, down 1.42 per cent) has declined sharply breaking below the key level of 34,000. It is now bearish to see 33,000 on the downside.
Futures: The Nifty 50 February Futures (17,182) is up about 0.65 per cent. Immediate support is at 17,120. As long as the contract trades above this support, a rise to 17,300 is possible. However, a strong break above 17,300 is necessary to turn bullish to see 17,500 levels again. A pull-back from 17,300 will increase the danger of breaking below 17,120 and see a fall to 17,000 and even lower in the coming days. As such, price action around 17,300 will need a close watch.
Considering the ongoing geopolitical tensions between Russia and Ukraine, we prefer to remain cautious rather than become bullish. As such, we suggest traders stay out of the market. However, wait for a rise and go short if the contract declines from 17,300. Keep the stop-loss at 17,370. Trail the stop-loss down to 17,260 as soon as the contract falls to 17,210. Move the stop-loss further down to 17,190 when the contract touches 17,160 and book profits at 17,130.
Trade Strategy:
1 Go short on a reversal from 17,300. Keep the stop-loss at 17,370 for the target of 17,130.
2 Trail the stop-loss down to 17,260 as soon as the contract falls to 17,210.
3 Move the stop-loss further down to 17,190 when the contract touches 17,160.
Supports: 17,300 and 17,400
Resistances: 17,120 and 17,000
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