Nifty Call: Stay out of the market

BL Research Bureau

Nifty 50 December Futures (17,200)

The Santa Claus rally seems to have begun. The Sensex and Nifty 50 have extended the gains today after rising on Monday. The Sensex is at 57,762, up 0.6 per cent and Nifty is at 17,195, up 0.63 per cent. The rise to 17,200 on the Nifty mentioned yesterday has happened. There could be room for a further rise to 17,300-17,350 or even 17,400 from here in the coming days. However, thereafter a fresh fall is possible as the broader trend is likely to remain down. Similarly, Sensex can test 58,500-59,000 on the upside and then reverse lower going forward.

In the US the Dow Jones Industrial Average (36,302, up 0.98 per cent) has risen well above 36,000 on Monday. It can move up further to test 37,000 on the upside and then come down again. In Asia, the major indices are trading mixed. Nikkei 225 (28,980) is up 1 per cent and Kospi (3,005) is up 0.2 per cent. Shanghai Composite (3,616) and Hang Seng (23,228) indices are trading flat.

Futures: The Nifty 50 December (17,200) is trading higher. Immediate support is at 17,160. While the contract stays above this support, the contract can rise to 17,300. We expect the upside to be capped at 17,300 for now. A pull-back to 17,200-17,150 can be seen from 17,300.

We continue to prefer staying out of the market for this whole week. But if you are a more risk appetite trader and want to take positions, make use of dips, and go long at 17,185. Keep a tight stop-loss at 17,130. Book profits at 17,280.

Strategy: We continue to prefer staying out of the market. Trade only if you have high-risk appetite.

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