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Sensex and Nifty 50 are trading lower taking cues from the fall the global equities. Both the indices are down about 0.2 per cent each. However, the Indian benchmark indices are trying to bounce back from their lows. This signals the presence of fresh buyers at lower levels.
Nifty at 18,003 has bounced back well from the low of 17,928. Strong support is at 17,900-17,880. As long as the Nifty sustains above this support zone, the chances are still alive for it to rise towards 18,100-18,200 region. The index will come under pressure only if it falls below 17,900. In that case it can test 17,800-17,750 on the downside. Such a fall looks less probable. We expect the Nifty to sustain above 17,900 and see a rise in the coming sessions.
Global indices
All the major Asian indices are down following the sharp fall in the US markets overnight. Nikkei 225 (27,509), Shanghai Composite (3,243), Kospi (2,456) and Hang Seng (20.866) are all down in the range of 0.2-0.8 per cent.
In the US, the Dow Jones Industrial Average (33,696) fell sharply by 1.26 per cent after the wholesale price inflation data release. The index is now poised near the lower end of its 33,500-34,500 range. It will have to be seen if the Dow Jones can rise back today and retain the range.
Nifty 50 Futures
The Nifty 50 February Futures (18,000) is down 0.34 per cent. It has resistance at 18,050 and support at 17,900. There are chances to see an intraday fall to 17,900 today. However, a break below 17,900 is less likely. We expect the contract to bounce back from around 17,900 again and rise to 18,050-18,100 in the coming sessions.
Trading Strategy
Traders can make use of dips and go long at 17,910. Keep the stop-loss at 17,870. Trail the stop-loss up to 17,930 as soon as the contract moves up to 17,960. Move the stop-loss further up to 17,975 when the contract touches 17,990. Book profits at 18,020.
Supports: 17,900, 17,800
Resistances: 18,050, 18,200
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