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BL Research Bureau
Nifty 50 February Futures (15,110)
The Indian benchmark indices opened with a gap-up despite the Asian market providing negative cues. But the gain did not last long and soon after opening, both the indices started to fall, and right at present the Nifty 50 and the Sensex are trading lower by 0.6 and 0.7 per cent, respectively as against yesterday’s closing level. In Asia, major indices like the Nikkei 225 and Hang Seng have lost 0.2 per cent and 1.5 per cent, respectively.
The Nifty 50 index’s market breadth is showing a bearish tendency as 30 out of the 50 stocks in the index are trading in the red. Yet, the volatility index – India VIX – is flat today so far and stands at 21.60 levels.
Although the benchmark indices face downward pressure, the mid- and small-cap indices have gone up in the range of 0.4 and 1.2 per cent. Among the sectoral indices, the Nifty PSU bank index, extending yesterday’s gain, is the top gainer. It is now up by over 6 per cent. This is followed by the Nifty metal index, up by 1.5 per cent. At the other end of the spectrum, the Nifty financial services and the Nifty private bank index are the top losers, down by 1.1 and 0.9 per cent, respectively.
Futures: The Nifty 50 futures (February expiry) began the day at 15,221 i.e., with a marginal gain following the positive open of the underlying index. However, after marking an intraday high of 15,255 the contract overturned and fell. It breached the supports at 15,200 and 15,160 and is now testing the support of 15,100. The price action looks shaky, and the indications like the advance-decline ratio and the weak equity market across Asia hint at a further decline.
But since 15,100 is support, traders can wait and initiate fresh short positions once this level is breached. Stop-loss can be placed at 15,160. Below 15,100, the contract can find support at 15,070 and 15,000 – a critical base. Notably, a breach of 15,000 can intensify the sell-off.
Strategy : Sell the contract with a stop-loss at 15,160 if it breaches below 15,100
Supports : 15,070 and 15,000
Resistances: 15,160 and 15,230
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