BL Research Bureau

Nifty 50 January Futures (14,600)

Even as the Asian markets are giving out mixed signals, the domestic market opened on a high. The benchmark indices, i.e., the Nifty 50 and the Sensex opened with a considerable gap-up. However, the rally does not seem to sustain as both the indices have dropped off from their respective day’s high. As of now, both the indices have given up all the gains and are trading around yesterday’s closing level.

Despite the Nifty 50 declining since the session open, the market breadth seems bullish as the advance-decline ratio stands at 30-20. Nevertheless, the volatility has shop up, i.e., the volatility index – India VIX – has gone up by nearly 4 per cent to 23.75.

The mid- and small-cap indices look to be under pressure as they are trading marginally lower today. Among the sectoral indices, the Nifty realty and PSU bank indices are the top performers, gaining about 1.4 per cent. The Nifty financial services and IT index are the laggards, down by 0.6 per cent and 0.5 per cent, respectively.

Th Nifty 50 futures (January expiry), like the underlying Nifty 50 spot index, begun the session on a substantial gap-up. That is, it opened at 14,653 as against yesterday’s close of 14,597. But then, facing selling pressure, the contract started to decline and is currently trading around 14,600 – a support level. But the price action since morning gives the contract a bearish bias.

Given these factors, traders can short the contract if it decisively falls below 14,600. Stop-loss can be at 14,650. On the downside, the potential support levels can be seen at 14,570 and 14,500.

Strategy: Sell if the contract falls below 14,600

Supports: 14,570 and 14,500

Resistances: 14,630 and 14,660

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