The Indian benchmark indices – the Nifty 50 (17,920) and the Sensex (60,090) – which opened with a marginal gap-up today, gave up the gains and are now down by 0.4 per cent, each.

Substantiating the bearish bias, the advance/decline ratio, at 17/33, indicates a bearish bias. Like the benchmark indices, all the mid- and small-cap indices too are in the red. Besides, barring the Nifty FMCG (up by 0.3 per cent), all other sectoral indices have lost. Thus, the selling seems to be broad-based today and this can drag the Nifty futures further.

Nifty 50 futures

The January futures of the Nifty 50 index, which opened at 18,074 versus yesterday’s close of 18,066, has fallen to the current level of 17,985.

Since it has slipped below the 18000-mark signalling bearishness, we expect Nifty futures to decline to 17,900, its immediate support. Subsequent support is at 17,800.

But if the contract reclaims 18,000 levels and appreciates, it will face hurdles at 18,075 and 18,200.

Trading strategy

Since the possibility of a decline appears high, traders can short Nifty futures at the current level of 17,985. Place stop-loss at 18,075 at first and tighten it to 18,000 when price touches 17,900. Exit the shorts at 17,850.

Note that the above trade recommendations are for intraday. So, exit the positions by the end of the day if either target or stop-loss levels are not hit.

Supports: 17,900 and 17,800

Resistance: 18,075 and 18,100