Nifty call: Traders with high-risk appetite can initiate trade in 17,170–17,270 range

Nifty 50 December Futures (17,225)

Equity indices across Asia seems to be sending out bearish signals as all the major indices are down barring the ASX 200 (up by 1.2 per cent). Other indices like the Nikkei 225, Hang Seng and KOSPI are down by 0.7, 0.9 and 0.8 per cent, respectively.

Despite the bearish bias, the Indian benchmark indices opened the day on a flat note. The Nifty 50 is at 17,225 and the Sensex is at 57,885.

Although the Nifty is flat, the market breadth is indicating a bearish bias as the advance-decline ratio stands at 22-28. Similar to the benchmark indices, the Midcap 50 and the Smallcap 50 are also trading flat today.

Among the sectoral indices, the Nifty Healthcare is the top gainer, up by 1.3 per cent, whereas the Nifty Media is the top loser, down by 1.2 per cent.

Futures: The December futures of the Nifty opened the session almost flat at 17,238 versus yesterday’s close of 17,246. While it rallied and marked an intraday high of 17,287, it has now pulled back to 17,225. The contract seems to be stuck within the range of 17,170 and 17,270; unless either of these levels are breached, we cannot assume the next leg of trend. We have been recommending staying out of the market since the beginning of this week because of thin volume due to the year-end. We continue to reiterate the same.

Nevertheless, traders with high risk appetite can consider initiating fresh trades along the direction of the break of the range 17,170 – 17,270. A breakout of 17,270 can lift the contract to the immediate resistance at 17,330. But a rally beyond this level is less likely. On the other hand, a break below 17,170, a likely scenario, can drag the contract to 17,100 and then possibly to 17,000.

Strategy: Traders with high risk appetite can execute fresh trades along the direction of the break of the range 17,170 – 17,270

Supports: 17,170 and 17,100

Resistances: 17,270 and 17,330

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