The Indian benchmark indices – the Nifty 50 (18,650) and the Sensex (62,710) – are trading lower by about one-third of a percent for the day. This is despite most of the Asian equity indices trading in the green. Among the Asian majors, ASX 200 (7,325). Nikkei 225 (27,830) and Hang Seng (19,300) are down in the range of 0.2 – 3.2 per cent. That said, KOSPI is down by 0.6 per cent.

Looking at the Nifty 50’s market breadth, the market seems to exhibit a bearish bias as the advance/decline ratio stands at 15/35. Interestingly though, the mid- and small-cap indices seem to show some positive bias. For instance, Midcap 50 and Smallcap 50 are up by 0.1 and 0.5 per cent, respectively.

Among the sectors, the Nifty PSU Bank is the top gaining index, up by nearly 0.8 per cent whereas the Nifty IT is the top loser, down by 0.8 per cent.

Nifty 50 futures

The December futures of the Nifty 50 index opened this week slightly lower at 18,799 versus last week’s close of 18,812. It is currently trading at around 18,770.

As long as the contract lies below the resistance at 18,830, the intraday trend is likely to stay bearish. From the current level of 18,770, the nearest support is at 18,680. Subsequent support is at 18,600.

That said, a breach of 18,830 can result in a rally to 19,000 – a key level.

Trading strategy

Since the contract is now trading below 18,830, we suggest approaching the contract with a bearish bias for intraday.

Short Nifty futures at the current level of 18,770 and add more shorts when price moves up to 18,800. Place the stop-loss at 18,860. When the price slips below 18,680, revise the stop-loss down to 18,775. Exit the shorts at 18,600.

Supports: 18,680 and 18,600

Resistance: 18,830 and 18,900

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