NSE Nifty50 witnessed a bearish opening today at 22,231 compared to yesterday’s close of 22,303. At the end of first hour of trading the index declined by 0.35 per cent.
The Asian counterparts of Nifty50 have been sending mixed signals. While Nikkei 225 (38,200) and Hang Seng (18,440) were down 1.5 and 0.25 per cent, respectively KOSPI (2,740) advanced 0.25 per cent. ASX 200 (7,790) is flat.
In the domestic market, like the benchmark index, most of the sectoral indices are in the red. Nifty Private Bank, down 0.9 per cent, is the top loser and consequently, Nifty Bank has dropped nearly 0.8 per cent. Among the few gainers, Nifty Oil & Gas topped the chart by adding 1.2 per cent.
As Nifty50 continues to exhibit bearish bias, similar trend is seen in the Nifty futures as well.
The May futures of Nifty 50 opened today’s session lower at 22,344 against yesterday’s close of 22,382. It has moderated further to around 22,320, down 0.3 per cent so far today.
So long as Nifty futures stays below 22,500, the bias will be bearish. The probability remains high for the contract to decline to 22,200 soon.
However, there might be a minor uptick, possibly to 22,400, before the fall. But the chances are slim. Given the current downward momentum, traders are recommended to be on the short side of the trade.
Trading strategy
Sell Nifty futures now at 22,320. Add more shorts if the contract rises to 22,400. Place stop-loss at 22,450. When the contract falls to 22,250, tighten the stop-loss to 22,320. Book profits at 22,200.
Supports: 22,250 and 22,200
Resistances: 22,400 and 22,500