BL Research Bureau
Nifty 50 December Futures (17,428)
Sensex and Nifty 50 are trading mixed. The recovery rally that has been in place since the beginning of this week seems to be losing momentum. Sensex is trading at 58,441, down marginally by 0.03 per cent. Nifty 50 on the other hand is up slightly by 0.04 per cent and is trading at 17,408. Resistance for the Nifty is at 17,500. A strong break above this is needed for the Nifty to move up further towards 17,600-17,650. Sensex on the other hand will have strong resistance in the 59,000-59,500 region which has to be broken to see further higher levels.
In Asia, barring the Hang Seng index (23,736, down 0.22 per cent), all other indices are positive. Nikkei 225 (28,006) and Shanghai Composite (3,605) are up 0.9 per cent each while Kospi (2,970) is up 0.84 per cent.
In the US, the Dow Jones Industrial Average (34,639) had risen back sharply after testing the crucial support level of 34,000. It is important for the Dow to sustain above 34,000 in order to avoid a much steeper fall. The jobs data release from the US today will be important to watch.
Futures: The Nifty 50 December (17,428) futures contract has a good resistance at 17,535 which is holding as of now. A strong break above 17,535 to see a further rise to 17,600-17,700. As long as the contract trades below 17,535, the chances are high for it to fall towards 17,200 in the coming sessions. It will also keep the broader bearish view intact. A break below 17,200 will accelerate the fall to 17,000.
Traders can wait for a rise and go short on a reversal from 17,535. Keep the stop-loss at 17,620. Trail the stop-loss down to 17,480 as soon as the contract comes down to 17,410. Move the stop-loss further lower to 17,420 as soon as the contract falls to 17,340. Book profits at 17,240.
Strategy: Go short on a reversal from 17,535 with a stop-loss at 17,620 for the target of 17,240. Trail the stop-loss down to 17,480 as soon as the contract comes down to 17,410. Move the stop-loss further lower to 17,420 as soon as the contract falls to 17,340.