Domestic benchmarks Nifty 50 (17,410) and the Sensex (59,135) have begun the session with a gap-down and have extended the losses. Both indices are now down by a little over 1 per cent each.
The advance/decline ratio of the Nifty 50 stands at 12/38 painting an overall bearish picture. All the mid- and small-cap indices, too, are down.
Among the sectoral indices, only Nifty FMCG is the gainer, up by a marginal 0.15 per cent. On the other hand, Nifty PSU Bank index is the top loser, down by 2 per cent.
Nifty 50 futures
The March futures of the Nifty 50 index opened the session lower at 17,490 against yesterday’s close of 17,645. It has dropped further to mark a low of 17,367 before recovering to the current level of 17,430.
Notably, the price region of 17,350–17,380 is a good support zone. If this is breached, the sell-off might intensify and the price could drop to the next support level of 17,200. Subsequent support is at 17,000.
On the other hand, if the contract recovers on the back of the above-mentioned support zone, it might see a rise to 17,550. The upside might extend to 17,630.
Despite bearish indications, Nifty futures is now testing a considerable support. Also, the risk-reward ratio is unfavourable for short positions.
Traders with a high-risk appetite can go long now at around 17,430. Place stop-loss at 17,350. When the contract touches 17,550, tighten the stop-loss to 17,470. Exit at 17,630.
Note that the above trade recommendation is for intraday. So, exit the positions by the end of the day if either target or stop-loss level is not hit.
Supports: 17,380 and 17,350
Resistances: 17,550 and 17,630
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