Nifty 50 February futures (22,171)

The Nifty 50 has begun the week on a weak note. The index, trading at 22,143, is down 0.3 per cent so far today.

Nifty 50 outlook

The price action since the last week indicates that the Nifty lacks strong follow-through buying above 22,250. But at the same time, in the absence of strong sellers it cannot be dragged decisively below 22,000.  This leaves the short-term picture mixed and unclear.

The Nifty could dip towards 22,000 during the day. But whether it breaks below 22,000 will determine the next move. A bounce from around 22,000 can take the Nifty up to 22,250 again. On the other hand, a break below 22,000, can drag it down to 21,800. We will have to wait and watch.

Global indices

In Asia, the Nikkei 225 (39,275) is up 0.45 per cent. The other major indices are in the red. The Kospi (2,651), Hang Seng (16,609) and Shanghai Composite (2,987) are all down in the range of 0.6-0.7 per cent.

The Dow Jones Industrial Average (39,131) made a high of 39,282 on Friday and has since come down from there. The 39,300-39,400 resistance region is being tested. Price action in the first few days of this week will be very important. Failure to breach 39,400 can trigger a strong corrective fall to 38,500 initially, and then further lower in the coming weeks.

Nifty 50 futures outlook

The Nifty 50 February futures (22,171) is down 0.27 per cent. The intraday outlook is bearish. The contract can fall to 22,070-22,050 during the day.

The price action thereafter will need close watch. A bounce from around 22,050 can take the contract up to 22,150 again. But a break below 22,050 can drag the Nifty 50 February futures contract down to 22,000.

Trade strategy

Traders with a high-risk appetite can go short now. Keep a stop-loss at 22,210. Trail the stop-loss down to 22,145 as soon as the contract falls to 22,125. Move the stop-loss further down to 22,105 when the contract touches 22,090 on the downside. Exit the shorts at 22,070.

Supports: 22,050, 22,000

Resistances: 22,190, 22,260