The benchmark indices – the Nifty 50 (17,830) and the Sensex (59,870) – show a bearish bias as they have lost nearly 0.4 per cent. The advances/ declines ratio of the Nifty 50 index, which stands at 17/34, shows more stocks are down in the index.
In addition, most of the mid- and small-cap indices and the sectoral indices are in the red, showing a broad-based sell-off so far. Among the sectors, Nifty Oil & Gas is the top loser, down by 0.8 per cent.
Nifty 50 futures
The January futures of the Nifty 50 index, which opened slightly higher at 17,983 versus yesterday’s close of 17,963, could not hold on to the gains and fell. It is now trading around 17,880, down by nearly 0.5 per cent.
Note that the price level of 17,880 is a key support for Nifty futures. A break below this level can intensify the sell-off, where the price could fall to 17,750 – a potential support. Below this level, 17,700 can offer support to the contract.
On the other hand, 17,940 is a strong resistance. A rally above this level is less likely today. The subsequent resistance is at 18,000.
Trading strategy
Traders can short Nifty futures if it declines below the support at 17,880. Place stop-loss at 17,950. Exit the shorts if the price drops to 17,750.
Note that the above trade recommendations are for intraday. So, exit the positions by the end of the day if either target or stop-loss levels are not hit.
Supports: 17,750 and 17,700
Resistance: 17,940 and 18,000