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BL Research Bureau
Nifty 50 December Futures (17,325)
The Asian markets look mixed as some indices are in green and some in red. Among the major indices, ASX 200 and Nikkei 225 lost 0.15 and 0.6 per cent, respectively. Hang Seng and KOSPI are up by 0.2 and 1.5 per cent, respectively.
Against this backdrop, the Indian indices began the session marginally higher and are now up by nearly 0.9 per cent for the day. While the Nifty 50 is at 17,310, the Sensex is at 58,175.
In line with the positive bias, the market breadth of the Nifty 50 is bullish as the advance-decline ratio stands at 41-9. On the other hand, Midcap 50 and Smallcap 50 are flat for the day. Interestingly though, barring the Nifty Realty (down by 0.6 per cent), all other sectoral indices are in the green. The Nifty Oil & Gas is the top gainer, up by 1.3 per cent followed by the Nifty Healthcare index, up by 1 per cent.
Futures: As the underlying Nifty 50 has been positive since open, the December futures of the index, which opened marginally lower (at 17,205 versus yesterday’s close of 17,222), started to rally soon after the session opened. Now trading around 17,325, the contract has gained by about 0.6 per cent for the day.
Although the contract has rallied, it faces resistance at 17,350 and 17,400. Also, 17,380 can be a minor hurdle. Moreover, the bearish bias will exist until the contract decisively breaches 17,400. A rally beyond 17,400 is less likely and the futures is expected to reverse lower from the current levels. A fall from here will drag the contract to the support at 17,250. Subsequent supports are at 17,200 and 17,175.
Given the above factors, one can short the contract at current levels i.e., around 17,325. Add more shorts if it rallies to 17,380 and place stop-loss at 17,420. The contract is likely to decline to 17,200. So, liquidate the shorts at this level. When the price falls below 17,250, revise the stop-loss to 17,300.
Strategy: Short at current level of 17,325 and at 17,380 with stop-loss at 17,420. Fully exit at 17,200.
Supports: 17,250 and 17,200
Resistances: 17,350 and 17,400
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