Domestic benchmarks Nifty 50 (18,020) and the Sensex (60,575) opened today’s session lower against yesterday’s close. At the time of filing this report, both the indices had lost nearly 0.6 per cent each.

Similarly, major Asian markets were in red – Nikkei 225 (26,290), ASX 200 (7,075), Hang Seng (19,705) and KOSPI (2,285) have lost between 0.9 and 1.5 per cent.

The market breadth of Nifty 50 is indicating strong bearish bias as the advance/decline ratio of the index stands at 4/46. Besides, all the mid- and small-cap indices and all the sectoral indices have been trading in red so far. With a loss of over one per cent, the Nifty Media is the the top loser.

Nifty 50 futures

Unlike the underlying, the December futures of the Nifty 50 index opened flat at 18,122 today. However, the contract fell afterwards and is now testing the important level of 18,000.

A breach of this level can result in a quick fall to the nearest support which is at 17,900. Subsequent support is at 17,745.

On the other hand, if the contract bounces off the support at 18,000, it will find barriers at 18,150 and 18,300.

Trading strategy

Although the trend is bearish, the contract has a support at 18,000. Moreover, today being expiry day, the index might also stay flat for the rest of the day. However, a breach of 18,000 can lead to a sharp fall.

Therefore, go short on Nifty futures if it slips below the support at 18,000. Place stop-loss at 18,060 and book profits if it touches 17,900.

Supports: 18,000 and 17,900

Resistance: 18,150 and 18,300

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