The Asian equity markets have begun the week on a mixed note. While the Nikkei 225 (27,966) and the KOSPI (2,727) are down by 0.7 per cent and 0.1 per cent respectively, the ASX 200 (7,412) and the Hang Seng (21,595) are trading higher by 0.1 per cent and 1.1 per cent, respectively. On the back of this, the Indian benchmark indices i.e., the Nifty 50 (17,054) and the Sensex (57,025), opened almost flat and are now down by nearly 0.6 per cent.

The market breadth of the Nifty 50 is showing a bearish bias as the advances/ declines ratio is at 14-36. Like the benchmarks, the mid- and small-cap indices are down so far, losing between 0.6 and 1.1 per cent. Most of the sectoral indices are in the red. The Nifty Consumer Durables and the Nifty Financial Services are the top losers, down by 1.5 and 1 per cent, respectively. Nifty Media is the top gainer, up by 1.2 per cent.

Futures: The March futures of the Nifty 50 index opened today’s session with a minor gap-up at 17,220 versus Friday’s close of 17,194. But since the opening of the session, it has been on a decline and is now hovering around 17,050.

Nevertheless, the contract is currently tracing a sideways trend with boundaries at 17,000 and 17,400. That means, until either of these levels is breached, we cannot assume the next leg of trend. One can probably adopt a range trading strategy until a decisive break occurs.

If the bears manage to drag the contract below 17,000, it will most likely drop to 16,900 – its nearest support. The subsequent support is at 16,750. On the other hand, if the contract regains strength and rallies past 17,400, it can advance to 17,500 and then possibly to 17,700.

That said, traders can stay out of the market and initiate trades along the direction of the break in the range of 17,000–17,400.

Strategy: The Nifty futures is stuck in the range of 17,000–17,400. Stay on the fence now and initiate trades along the direction of the break of the range.

Supports: 17,000 and 16,900

Resistances: 17,400 and 17,500

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