Nifty 50 February Futures (17,590)

The Indian benchmark indices are getting some breather today. Both the Sensex and Nifty 50 have risen back well from their day’s low and are up about 0.25 per cent each. Sensex is trading at 59,900 and Nifty is at 17,600.

The crucial support level of 17,450 on the Nifty has held very well. If this bounce sustains, there are high chances to see a further rise towards 17,650 during the day. Thereafter, it is important to see if it is getting a follow-through rise or not. A pull-back from around 17,650 can drag the index down to 17,500 levels again. As such, the price action in the coming sessions will need a close watch to see if the current bounce is just a correction or a reversal.

Also read: Sensex, Nifty dip in early trade as rate hike worries persist

Global indices

In Asia, Nikkei 225 (27,104) is down sharply by 1.3 per cent, while Shanghai Composite (3,293) is trading flat. Kospi (2,442) and Hang Seng (20,534) are up 1 and 0.54 per cent.

In the US, the Dow Jones Industrial Average (33,045) continues to fall. It can head down towards 32,800-32,500, if it fails to bounce back from current levels.

Nifty 50 Futures

The Nifty 50 February (17,590) is up 0.13 per cent. The contract has risen back sharply from the low of 17,461. It can now test the immediate resistance at 17,630. A break above 17,630 can take the contract further up to 17,680. A pull-back either from 17,630 itself or from around 17,680 can drag the contract down to 17,500 levels again. As such, we will have to wait and watch the price action to get clarity.

Also read: Why are logistics stocks bleeding?

Trading Strategy

For now, it is now clear if the current bounce is a reversal or just a corrective bounce. So, considering the danger of a pull-back again, we suggest traders to stay out of the market today.

Supports: 17,500, 17,450

Resistances: 17,630, 17,680

Related Topics