Nifty call: Stay out of the market as Nifty futures could show erratic movement

Nifty 50 January Futures (17,870)

Backed by the positive cues from the Asian market, the Indian benchmark indices opened on a positive note. The Nifty 50 and the Sensex rallied post opening and are at 17,850 and 59,930, respectively, gaining 0.6 per cent each. Among the Asian major indices, ASX 200 and Hang Seng are up by 1.3 and 1.9 per cent, respectively. Whereas Nikkei 225 is trading flat.

The market breadth of the Nifty is showing bullish bias as the advance-decline ratio is at 37-13. Similar to the benchmarks, all mid- and small-cap indices are trading in green, up between 0.3 and 0.8 per cent. A drop in volatility can be seen as shown by India VIX – the volatility index as it has dropped by 2 per cent.

Moreover, except the Nifty Auto (down by 0.3 per cent), all other sectors have gained. The Nifty Bank and the Nifty Private bank index are the top gainers, up by 1.2 and 1.1 per cent, respectively. Therefore, the uptrend seems to be healthy and so, the indices are expected to stay in the green today.

Futures: Similar to the underlying Nifty 50, the January futures of the index began the session with a gap-up ie, at 17,831 versus yesterday’s close of 17,788. It then rallied to mark an intraday high of 17,949 and has now moderated to 17,870. Nevertheless, as long as the contract stays above 17,830, the intraday trend can be bullish.

However, on the other hand, it has pulled back after hitting the resistance at 17,950. So, for the rest of the day, it is highly likely that the contract moves erratically within 17,830 and 17,950. Therefore, traders are advised not to initiate fresh positions at current levels.

Strategy: Stay out of the market as Nifty futures could show erratic movement for the rest of the day

Supports: 17,830 and 17,700

Resistances: 17,950 and 18,000

COMMENT NOW