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Nifty 50 January Futures (17,980)
Equity markets across Asia face considerable downward pressure as all major indices in the region are in the red. The early risers ASX 200 and Nikkei 225 are down by 1 and 3.1 per cent respectively, whereas others like Hang Seng and KOSPI have lost 0.6 and 1 per cent respectively. Against this backdrop, the Indian benchmarks, which began today’s session marginally higher, started to fall immediately after the open. Nifty 50 at 17,965 is down by 0.8 per cent and Sensex at 60,230 has lost 0.85 per cent.
In line with the bearish inclination, the market breadth of Nifty is showing negative bias i.e., the advance-decline ratio is at 12-38. Like the benchmark indices, the mid- and small-cap indices are down, losing between 0.15 and 0.7 per cent. Among the few sectoral indices that have gained today so far, the Nifty Media is the top draw, up by 1 per cent. This is followed by Nifty Metal, up by 0.25 per cent. On the other hand, the Nifty IT and Realty are the top losers, down by about 2 and 1 per cent, respectively.
Futures: The January futures of Nifty began the session slightly lower at 18,094 versus yesterday’s close of 18,124. After making an intraday high of 18,110, the contract reversed and started falling sharply. Currently trading around 17,980, the contract is now below the important level of 18,000. So long as it lies below 18,160 and 18,000, sellers will have upper hand.
From the current level, nearest supports can be found at 17,930 and 17,760. On the upside, resistances are at 18,000 and 18,160.
Considering the above factors, traders can initiate fresh shorts at current levels (17,980) and add more shorts if the contract rises to 18,160. Place stop-loss at 18,220. On the downside, when the contract slips below 17,900 revise the stop-loss to 18,050. Exit the shorts at 17,760.
Strategy: Sell now (17,980) and short more on a rally to 18,160; stop-loss at 18,220. Revise stop-loss to 18,050 if the contract falls below 17,900. Liquidate the shorts at 17,760.
Supports: 17,930 and 17,760
Resistances: 18,000 and 18,160
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