The Nifty call. Nifty 50 December Futures (17,535)

BL Research Bureau

The Asian markets are sending out mixed signals and despite this, the Indian benchmarks indices opened with a gap-up. However, both the Nifty 50 and the Sensex lost the gains and are now trading flat for the day. The Nifty 50 is at 17,470 and the Sensex is at 58,660.

The market breadth of the Nifty 50 is not showing any inclination as the advance-decline ratio is at 25-25. All the mid- and small-cap indices have gained between 0.3 and 1.3 per cent. Among the sectoral indices, the Nifty Media is the top gainer, up by 3.4 per cent and the Nifty Bank index is the top loser, down by 0.5 per cent.

Futures: The December futures of the Nifty 50 began the session with a gap-up at 17,545 versus yesterday’s close of 17,513. Although it made an intraday high of 17,578, the contract lost momentum and gave up the gains and is currently trading around 17,535. On the upside, the contract face resistance at 17,585 and a recovery beyond this level today is less likely.

Thus, traders can initiate fresh short positions at the current level and short again at 17,585. Place initial stop-loss at 17,625. The contract can be expected to reverse downwards if it rallies to 17,585 where it could fall to 17,500 and then possibly to 17,400.

Once the contract falls below 17,500, shift stop-loss to 17,550. Liquidate the shorts at 17,400.

Strategy : Short at current levels and when the contract rallies to 17,585. Place stop-loss at 17,625. Liquidate the shorts at 17,400. When price falls below 17,500, revise stop-loss to 17,550.

Supports: 17,520 and 17,400

Resistances : 17,585 and 17,625