Nifty 50 February futures (21,670)

The Indian benchmark indices are trading lower, taking cues from the sharp fall in the US markets overnight. US inflation data released on Tuesday failed to meet market expectations. It has reduced hopes in that the US Federal Reserve would continue to retain the rates higher and may not be in a hurry to begin the rate cut cycle.

Nifty Outlook

Nifty 50 is trading at 21,584, down 0.73 per cent. The index has been stuck between 21,500 and 21,850 over the last few days. Within this range, the bias is negative. We expect the Nifty to break the range below 21,500. Such a break can take it down to 21,200-21,000 in the coming sessions.

A strong rise past 21,850 is needed to negate the above-mentioned fall. Only in that case would chances of the rise to 22,000 come back into the picture.

Global indices

In Asia, the Hang Seng (15,769) is marginally higher by 0.15 per cent. Nikkei 225 (37,604) and Kospi (2,623) are down about a per cent each.

The Dow Jones Industrial Average (38,272) had tumbled 1.35 per cent on Tuesday. It has declined below the intermediate support level of 38,500. The Dow can now test 38,100 and 37,800 in the coming sessions.

Nifty 50 Futures outlook

The Nifty 50 February futures (21,670) is down 0.70 per cent. The contract tested its support at 21,600 on its opening trades and then has risen back from there.

Immediate resistance is at 21,700. A break above it can take the Nifty 50 February futures contract up to 21,800-21,850.

But failure to breach 21,700 from here can drag the contract down to 21,600 again. It will also increase the chances of the contract breaking below 21,600 and falling to 21,500 and lower.

Trading Strategy

Our preference will be to go short in the market. But it is not clear whether the contract will fall either from here itself or after a rise to 21,800-21,850. So, we suggest staying out of the market today.

Supports: 21,600, 21,500

Resistances: 21,700, 21,850

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