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Nifty 50 December Futures (18,826)
Domestic benchmarks BSE Sensex and NSE Nifty are trading sharply lower in early trade. Both the indices are down about 0.6 per cent each. Sensex was at 62,915, while Nifty 50 was at 18,704 at the time of filing this report.
Nifty has declined sharply below the key level of 18,800. As long as the index trades below 18,800, the chances are high for the Nifty to fall further towards 18,600. However, this could just be a corrective fall within the overall uptrend. So, we can expect the Nifty to bounce back from around 18,600 going forward.
Global cues
Major Asian indices are trading in red. Nikkei 225 (27,731) and Kospi (2,445) are down over one per cent each. Shanghai Composite (3,154) and Hang Seng (18,612) are down 0.34 and 0.66 per cent respectively.
In the US, the Dow Jones Industrial Average (34,395) fell 0.56 per cent yesterday. As long as it sustains above 34,000, the overall outlook is bullish for the Dow and will result in a rise towards 35,000 in the coming days.
Nifty 50 Futures
The Nifty 50 December Futures (18,826) is down 0.62 per cent so far today. It has room to test 18,770 during the day. It is important to see if the contract is managing to bounce from around 18,770 or not.
A bounce from 18,770 can take the contract up to 18,870 and 18,900 again. But a break below 18,770 will increase the downside pressure and drag the contract down to 18,700.
On the upside, 18,870 and 18,900 are important resistances. The Nifty 50 December Futures contract has to rise past 18,900 to bring back the bullish sentiment. It is a wait and watch situation.
Trading Strategy
Stay out of the market. The contract has an equal chance of testing the resistance at 18,870 or testing the support at 18,770.
Supports: 18,770, 18,700
Resistances: 18,870, 18,900
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