Nifty call: Sell on rallies with stop-loss at 12,065

Nifty 50 December futures (12,021)

The Nifty and the Sensex are trading lower today, despite positive cues from the Asian markets. Also, the benchmark indices of the US closed marginally higher yesterday. The Nifty spot index and the Sensex spot index are down by 0.25 per cent each.

After closing below support at 12,055, the December futures contract of the Nifty 50 index opened marginally higher at 12,065. But after registering a high of 12,082, the contract started to decline. It is currently trading at 12,021.

Volatility for the day has come down, with the India VIX, the volatility index, at 13.17, down by nearly 8 per cent. But the market breadth of the Nifty 50 index hints at a bearish bias, as the advances-declines ratio is at 13-37. Among the sectoral indices, all the indices barring the Nifty pharma index, were down today. The Nifty PSU bank index and the Nifty metal index are the top losers, each down by 2.8 per cent each. This, along with the market breadth, indicates broad-based selling.

The December futures of the Nifty is trading with a bearish bias, as it has broken decisively below the range between 12,055 and 12,110. Thus, the futures can be approached with a negative bias and traders can initiate short positions on rallies, with 12,065 as stop-loss.

Strategy: Sell on rallies with 12,065 as stop-loss

Supports: 11,975 and 11,935

Resistances: 12,055 and 12,110

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