Comments
Equity markets across Asia are trading in the red. Among the major indices, the early risers ASX 200 and Nikkei 225 have lost 0.6 and 2.2 per cent, respectively. The Hang Seng and KOSPI are down by 2.7 and 1.1 per cent, respectively. Following this negative bias, the Indian benchmark indices, the Nifty 50 (16,200) and Sensex (54,100), opened with a gap-down and have fallen 1.8 per cent each.
The market breadth of the Nifty 50 indicates a strong bearish bias as the advances-declines ratio currently stands at 6-44. Like the benchmarks, all the mid- and small-cap indices are trading in the red, losing between 1 and 1.8 per cent. All the sectoral indices are down as well, led by Nifty Auto and Nifty Consumer Durables, which are now down by 3.4 and 2.8 per cent, respectively. Therefore, the domestic market seems to be facing broad-based selling and, thus, the bearishness is likely to stay until the end of the day.
Futures: Following the underlying Nifty 50’s bearish beginning, the March futures of the index opened with a gap-down at 16,305 versus yesterday’s close of 16,505. Since the beginning of the session, the contract has been depreciating and is currently hovering around 16,200. Since the sell-off seems to be broad-based and the equities markets across Asia are facing downward pressure, the Nifty futures is likely to drop further.
From the current level of 16,200, the nearest support is at 16,000, below which support is at 15,900. This is an important support from where there could be a corrective rally. On the upside, resistances from the current levels are at 16,300 and 16,375.
Traders can consider going short on Nifty futures at the current level of 16,200, and add more shorts on a rally to 16,300. Place stop-loss at 16,400. When the contract slips below 16,000, tighten the stop-loss to 16,120. Liquidate the shorts at 15,900.
Strategy: Consider going short on Nifty futures at current levels of 16,200 and add more shorts on a rally to 16,300. Place stop-loss at 16,400. When the contract slips below 16,000, tighten the stop-loss to 16,120. Liquidate the shorts at 15,900.
Supports: 16,000 and 15,900
Resistances: 16,300 and 16,375
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.