Nifty call: Sell on rallies while maintaining a fixed stop-loss at 12,075 levels

Nifty 50 January futures (12,028)

The Sensex and Nifty started the session with a gap-down open, taking cues from the weak global markets. The US markets ended the last session on an almost flat note, while the Asian markets are hovering in the red.

The Nikkei 225 has tumbled 1.7 per cent to 22,977, while the Hang Seng index has plunged 2.4 per cent to 26,517 levels. Both the Sensex and the Nifty have continued to trend downwards and are down almost 0.7 per cent each. The market breadth of the Nifty index is biased towards declines.

The India VIX has advanced 1 per cent to 16.6. Witnessing selling pressure, the Nifty small-cap index has tumbled 1.4 per cent, whereas the Nifty mid-cap index has fallen 0.5 per cent. All the sectoral indices are trading in negative territory, led by the Nifty Pharma index, which has slumped 1.7 per cent. The PSU Bank and Nifty Bank indices have declined 1.1 per cent and 0.87 per cent respectively.

The index futures of January month started the expiry session with a gap-down open at 12,115. After marking an intra-day high at 12,117, the contract began to decline breaking a key support at 12,100 levels. Extending the down-move the contract breached another key base at 12,050 and recorded an intra-day low at 12,027.

The near-term outlook is bearish for the contract. Make use of intra-day rallies to go short with a fixed stop-loss at 12,075 levels. Resumption of the downtrend can test support at 12,000. An emphatic fall below this base can drag the contract down to 11,975 and 11,950 levels in the near term. Key resistances above 12,075 are at 12,100 and 12,120 levels.

Strategy: Sell on rallies while maintaining a fixed stop-loss at 12,075 levels

Supports: 12,000 and 11,975

Resistances: 12,075 and 12,100

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