Most of the Asian equity benchmarks are trading in the red. While ASX 200 is down by 0.75 per cent, Hang Seng and KOSPI are down by 4.5 and 0.9 per cent, respectively. Notably, Nikkei 225 has posted a gain of 0.15 per cent.

Despite the bearish bias across Asia, the Indian indices — the Nifty 50 (16,840) and the Sensex (56,390) — opened slightly higher. However, both have lost the gains and are now down by nearly 0.2 per cent each.

Yet, the market breadth of the Nifty 50 is showing a bullish sign as the advance-decline ratio is at 29-21. Interestingly, even though the benchmarks are trading lower compared to yesterday’s close, the mid- and small-cap indices are up today so far, gaining between 0.2 and 0.6 per cent. Also, most sectoral indices are up, led by Nifty Auto which is up by 1.8 per cent. On the other hand, the Nifty Metal is the top loser, down by 2.3 per cent.

Futures: The March futures of the Nifty 50 index opened almost flat at 16,890 versus yesterday’s close of 16,885. After marking an intraday high of 16,929 in the initial minutes of trade today, the contract reversed and fell lower to mark the day’s low at 16,811. But it has recovered a bit and is now hovering around 16,860.

The price band of 16,800–17,000 is a strong resistance band and thus, for the recent rally to be called a bullish trend reversal, it must breach 17,000 decisively. Until then bears will have a chance to make a comeback.

Traders holding long positions can exit now and re-enter on a decisive break of 17,000. Those holding short positions can retain your positions with a stop-loss at 17,025.

For fresh trades, we would recommend staying out until either 16,800 or 17,000 is invalidated. One can consider longs with stop-loss at 16,850 if 17,000 is decisively broken. Look for a target of 17,250. On the other hand, initiate fresh shorts if the contract slips below 16,800. Place stop-loss at 17,025 and look to exit at 16,500.

Strategy: Stay out now. Consider longs with stop-loss at 16,850 if 17,000 is decisively broken. Look for a target of 17,250. On the other hand, initiate fresh shorts if the contract slips below 16,800. Place stop-loss at 17,025 and look to exit at 16,500.

Supports: 16,800 and 16,500

Resistances: 17,000 and 17,250

Published on March 15, 2022