Nifty 50 December Futures (18,395)

The benchmark indices Sensex and Nifty 50 are witnessing some recovery in early trades after the last week’s sharp fall. Both the indices are up 0.48 per cent each and currently Sensex is trading at 61,631 and Nifty 18,352.

Nifty is getting support near 18,250. However, it has to breach 18,400 decisively to ease the downside pressure of further fall and rise to 18,600-18,700 levels again. As such, we will have to wait and watch the price action for a few sessions to get clarity on the direction of move.

Global cues

Major Asian indices are all trading in red. The Shanghai Composite (3,120) and Nikkei 225 (27,220) are down over a per cent each. Hang Seng (19,339) and Kospi (2,346) are down about 0.55 per cent each.

In the US, the Dow Jones Industrial Average (32,920.46) had declined further on Friday and has closed below 33,000. Inability to bounce back above 33,000 can drag it down to 32,500 and even lower in the coming days.

Nifty 50 Futures

The Nifty 50 December Futures (18,395) is up 0.36 per cent today. The contract has an important resistance at 18,500. It has to breach this hurdle decisively to gain bullish momentum. Only in that case, a rise to 18,650-18,700 is possible. Support is around 18,300. A break below it can take it down to 18,200.

For now, 18,300-18,500 looks to be the range of trade. Within this, the contract is now poised at the mid-point of this range and has equal chances to go up to 18,500 or fall to 18,300. We will have to wait for a breakout on either side of this range to get a cue on the next direction.

Trading Strategy

Since the Nifty 50 December Futures contract can go either way from here, we suggest traders to stay out of the market.

Supports: 18,300, 18,200

Resistances: 18,500, 18,650