BL Research Bureau

Nifty 50 March Futures (9,350)

The rally on Friday appears to have been a just pull back move, as the stock market resumed its downtrend today. Following the cues from the major Asian markets, the Indian benchmark indices witnessed a gap-down opening. Currently, the Nifty spot and the Sensex spot indices are trading lower by 5.5 per cent each. While the Nikkei and the Shanghai composite indices are down by 2.5 per cent each, the Hang Seng index has lost nearly 4 per cent so far.

Confirming the broad bearish sentiment, the advance-decline ratio of the Nifty 50 index is at 2-48, and all the mid-cap and small-cap indices have declined by over 4 per cent. Also, all the sectoral indices are in the red. The top losers are the Nifty PVT bank index and the Nifty realty index, each down by about 7 per cent. Adding to the bearish bias is the higher volatility, which is indicated by India VIX – the volatility index. It is up by nearly 12 per cent to 57.5 levels.

After posting a gain on Friday, the Nifty index seems to have given in to the bears today. The March futures contract opened at 9,514 versus its previous close of 9,897 i.e. with a gap down of 383 points. The contract’s intraday high and low are at 9,570 and 9,254 respectively.

The major trend is bearish and the sell-off is broad-based. Stop-loss levels can be wider (from current levels) compared to an average trading day because of higher volatility. Traders with higher risk appetite can short the contract on rallies with stop-loss at 9,500.

Strategy : Sell on rallies with stop-loss at 9,500

Supports: 9,260 and 9,200

Resistances: 9,500 and 9,570

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