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Indian benchmark indices – the Nifty 50 (17,615) and the Sensex (59,375) – have witnessed a very volatile beginning to the week. After opening the session with a gap-down, both indices rallied sharply only to give it back. As it stands, both indices are now trading near last week’s close.
Elsewhere in Asia, the equity indices are exhibiting a bearish bias. Among the major indices, Nikkei 225 (27,360) and ASX 200 (7,490) are down by 0.1 per cent each whereas Hang Seng (22,420) and KOSPI (2,455) are down 1.2 per cent each.
In the domestic market, Nifty IT is the top gainer, up by 0.5 per cent whereas Nifty Oil and Gas is the top loser, down by 3.6 per cent.
Also read: Adani-Hindenburg issue to anchor market movement
Nifty 50 futures
The February futures of the Nifty 50 index opened lower at 17,640 versus Friday’s close of 17,687. It is currently trading around 17,735.
The contract is experiencing huge volatility now. If it rallies from the current level, it will face resistance at 17,850. Subsequently, the price band of 17,950-18,000 is a strong barrier.
On the other hand, if the contract drops from here, the nearest support can be seen at 17,550. Support below this level are at 17,500 and 17,400.
Trading strategy
Given the current volatility, traders should go for deep stop-loss levels, increasing the risk. The risk-reward ratio is unfavourable for both long and short positions. Therefore, we recommend staying out of the market today.
Supports: 17,550 and 17,500
Resistance: 17,850 and 17,900
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