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Nifty 50 March Futures (17,100)
Even as the major Asian indices are trading in the green, Indian benchmark indices opened flat today and dropped. The Nifty 50 (17,050) and the Sensex (57,060) are down by 0.4 per cent each, so far. Among the Asian indices, ASX 200 (7,341) and Nikkei 225 (27,190) are up by 0.9 and 1.4 per cent, respectively, and, similarly, Hang Seng (21,595) and KOSPI (2,708) are up by 1.9 and 0.8 per cent, respectively.
Coming back to the domestic market, the market breadth of the Nifty 50 is indicating a bearish bias – that is, the advance/decline ratio stands at 13/37. But the mid- and small-cap indices look mixed. While the Midcap 50 is down by 0.7 per cent, the Smallcap 50 is up by 0.3 per cent. Among the sectoral indices, Nifty Oil and Gas is the top performer, up by 1.3 per cent, whereas Nifty FMCG is the top loser, down by 2 per cent.
Futures: The March futures of the Nifty 50 index opened today’s session slightly lower at 17,141 versus yesterday’s close of 17,158. Although it initially went up to mark a high of 17,175, the contract declined and is currently trading at around 17,100. The intraday price action looks weak and hints at the possibility of further depreciation. A drop below the crucial support of 17,000 can trigger a sharp fall to 16,850.
However, the support at 17,000 is strong and the contract has been displaying bullishness. Therefore, the Nifty futures will most likely witness a rally from the current level of 17,100 or after touching 17,000. On the upside, it could advance towards 17,220 and then possibly 17,275 today. A breach of 17,275 can lift the contract to 17,340.
Strategy: Consider initiating fresh long positions at the current level of 17,100 and add more longs when the contract drops to 17,000. Place initial stop-loss at 16,900. When the contract moves above 17,220, revise the stop-loss to 17,075. When the contract touches 17,275 book three-fourth of your holdings and tighten the stop-loss further to 17,150. Liquidate the balance one-fourth of your longs at 17,340.
Supports: 17,000 and 16,850
Resistances: 17,220 and 17,275
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