Taking cues from the positive Asian markets, the Indian benchmark indices opened with a gap-up. However, as it stands, they have given up most of the gains and thus, the Nifty 50 is 16,620 and the Sensex is at 55,510. Among the Asian majors, Nikkei 225 and ASX 200 is up by 0.7 per cent each; Hang Seng and KOSPI is up by 0.6 and 1.4 per cent, respectively.

The market breadth of the Nifty 50 is showing a bullish bias as the advance-decline ratio is at 29-21. The mid- and small-cap indices are up between 0.1 and 1 per cent. Among the sectoral indices, the Nifty IT and the Nifty Oil and gas are the top gainers, up by 1.5 per cent each. On the other hand, the Nifty Bank and the Nifty Private bank index are the top losers, down by 0.6 and 0.5 per cent, respectively.

Futures: Following the underlying Nifty 50’s positive beginning, the March futures of the index opened with a gap-up at 16,741 versus yesterday’s close of 16,613. Post opening, the contract declined and marked an intraday low of 16,605. It recovered a bit and is now hovering around 16,650. The price action since the last week suggests that 16,750 is a strong resistance and until this level is breached, the bears will have an upper hand over the bulls. Therefore, from the current level of 16,650, the likelihood of a fall is high, and risk-reward is favourable for taking short positions at current juncture. On the downside, the supports can be seen at 16,500 and 16,375.

Strategy: Consider initiating fresh shorts at current levels of 16,650. Add more shorts when the contract moves up to 16,700 and place stop-loss at 16,800. When the contract slips below 16,500, revise the stop-loss to 16,625. Exit the shorts when price falls to 16,400.

Supports: 16,500 and 16,375

Resistances: 16,750 and 16,800

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