Nifty Futures (21,960)

Nifty 50 began today’s session lower at 21,946 versus yesterday’s close of 22,056. It further declined to 21,890, down 0.8 per cent.

The advance/decline ratio of Nifty 50 stands at 7/43, giving the index a bearish inclination. Bharti Airtel, up 0.7 per cent, is the top gainer whereas Cipla, down 2.8 per cent, is the top loser .

Similar to the benchmark index, the mid- and the small-cap indices have fallen. Also, the overall volatility has gone up today. This is indicated by India VIX—the volatility index—which has gone up over 3 per cent to 14.4.

All the sectoral indices are in the red led by Nifty IT, down 1.7 per cent. This is followed by Nifty Pharma, down 1.3 per cent. The mid- and small-cap indices and all the sectors declining together indicate a broad-based selling.

Nifty 50 Futures

The March futures of Nifty 50 opened today’s session lower at 22,070 against yesterday’s close of 22,135. It fell further and was trading around 21,960, down 0.8 per cent.

The contract has now fallen below the support at 22,000, increasing the odds for more decline. While 21,800 is the nearest support, subsequent one can be found at 21,500.

On the other hand, if Nifty futures recovers above 22,000, it can rise to 22,130, a resistance. Next resistance is at 22,200. But given the prevailing price action, the likelihood of a fall is high.

Trading Strategy

Short Nifty futures now at 21,960 and on a rally to 22,000. Place stop-loss at 22,150. Tighten the stop-loss to 21,920 when the contract slips to 21,800. Book profits at 21,550.

Supports: 21,800 and 21,500

Resistances: 22,000 and 22,130