Nifty 50 December Futures (17,395)

Indian benchmark indices saw sharp rise in initial trades today. Both the Sensex and Nifty 50 have broken their narrow sideways consolidation on the upside. Sensex has risen above 58,000. It is trading at 58,183, up 0.67 per cent. Nifty has risen above 17,300. It is at 17,334 up 0.76 per cent. As mentioned yesterday, Sensex can rise to 59,000 and Nifty can test 17,400 and even 17,450-17,500 in the near-term. However, we reiterate that the broader trend is down. As such the upside is likely to be capped at 59,000 on the Sensex and 17,400-17,500 on the Nifty. We can expect the indices to reverse lower again as the market progress into the new year.

In Asia some of the markets like Japan, Korea are closed today. Among the other major indices, Shanghai Composite (3,638, up 0.55 per cent) and Hang Seng (23,397, up 1.24 per cent) are trading in the green.

In the US, the Dow Jones Industrial Average (36,398, down 0.25 per cent) dipped yesterday. The near-term outlook is bullish. The Dow can test 37,000 on the upside as long as it stays above 36,000.

Futures

The Nifty 50 January (17,394) Futures contract has surged over 1 per cent today. While this momentum sustains, a further rise to 17,500-17,550 is possible in the near-term. Support for the contract is in the 17,300-17,270 region. While above this support zone, the near-term outlook is bullish to see 17,500-17,550 levels as mentioned above.

Being the final trading day of the week and year, we will continue to stay out of the market. However, considering the broader downtrend, we will get ready to take fresh short positions next week as the contract moves up to 17,500-17,550.

Strategy

Stay out of the market for now. But will be prepared to go short next week at much higher levels.

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