BL Research Bureau

Nifty 50 December Futures (17,230)

Domestic equity market is positive today and the benchmark indices i.e., the Nifty 50 and the Sensex have gained over 1 per cent each and are at 17,180 and 57,740, respectively. In Asia, among the major indices, all are trading in the green, barring ASX 200 (lost 0.3 per cent). Nikkei 225, Hang Seng and KOSPI are up by 0.3, 0.9 and 2.1 per cent, respectively.

Following Nifty’s gain, the market breadth is showing a bullish bias i.e., the advance-decline ratio is at 40-10. Mid- and small-cap indices too are up, gaining between 0.15 and 0.8 per cent. Volatility seems to have dropped as indicated by India VIX, which has dropped by 5.5 per cent to 20. A drop is volatility is positive for the market. Among the sectoral indices, apart from the Nifty Healthcare (down by 1.2 per cent) and the Nifty Pharma (down by 1 per cent), all other indices have gained. The Nifty Private bank and Nifty Bank index are the top performers, up by 1.8 and 1.6 per cent, respectively.

Futures: The Nifty December futures began the session positively at 17,118 as against yesterday’s close of 17,033. Currently trading around 17,230, it is up about 1.2 per cent so far. Although the price action over the past few sessions hint at range-bound movement (largely between 17,000 and 17,300), the intraday trend can be bullish. This is corroborated by positive Asian markets and bullish market breadth. Moreover, the contract is now trading above an important level of 17,200.

Thus, for intraday, one can consider taking long positions. That is buy Nifty futures at current level of 17,230 and accumulate if it moderates to 17,180. Place stop-loss at 17,140. Liquidate the longs at 17,300 – the immediate resistance. If the contract rallies above 17,250 without softening to 17,180, maintain stop-loss at 17,200.

Strategy: Buy at 17,230 and 17,180 with stop-loss at 17,140. Fully exit at 17,300.

Supports: 17,200 and 17,150

Resistances: 17,300 and 17,380

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