Nifty call: Sell on rallies while maintaining a stop-loss at 14,865 levels

Nifty 50 February futures (14,780)

The domestic equity benchmark indices -- the Sensex and the Nifty 50 -- commenced the session on a flat note and immediately slipped into negative territory. Thereafter, on the back of selling interest, the benchmark indices continued to trend downwards. The Asian markets are mixed; the Nikkei 225 is up by 0.46 per cent at 30,156, while the Hang Seng index is down by 0.5 per cent at 30,489 levels in today's session.

The Sensex and the Nifty 50 have fallen about 1.4 per cent so far. The market breadth of the Nifty 50 index is biased towards declines. On the other hand, the India VIX has jumped 9.8 per cent to 24.4 levels. Selling interest is witnessed in the Nifty mid and small-cap indices that have declined 1 per cent and 0.8 per cent respectively. Barring the metal index that has gained 2.8 per cent, all the other sectoral indices are in negative territory. The top sectoral losers are Nifty media and Nifty PSU Bank, which have tumbled 2.8 per cent and 2.68 per cent respectively.

Following a flat open at 14,982, the Nifty February month contract tested resistance at 15,000 and resumed the downtrend. The contract breached support at 14,900 and 14,800 levels. It has recorded an intra-day low at 14,760. The near-term outlook is bearish. As long as it trades below 14,850, the near-term trend will remain bearish.

Traders can make use of intra-day rallies to go short while maintaining a stop-loss at 14,865 levels. A decisive fall below the immediate support level of 14,750 can drag the contract down to 14,725 and then to 14,700 levels. Next supports are at 14,680 and 14,650 levels. Resistances above 14,800 are at 14,830 and 14,850 levels, which are key hurdles.

Strategy: Sell on rallies while maintaining a stop-loss at 14,865 levels

Supports: 14,750 and 14,725

Resistances: 14,800 and 14,850