The Indian benchmark indices – the Nifty 50 (18,085) and the Sensex (60,750) – began the week slightly higher. Both the indices are now up by 0.2 per cent each for the day.
There is a mixed signal looking at the Asian market. Among the major indices, while the Nikkei 225 (26,740) is up by 2.4 per cent, the KOSPI (2,360) has lost 0.8 per cent. On the other hand, ASX 200 (7,380) and Hang Seng (21,565) are trading flat.
The mid- and small-cap indices, like the benchmarks, are also exhibiting positive inclination as they have gained between 0.2 and 0.5 per cent. This indicates broad-based buying.
Among the sectors, the Nifty Metal is the top gainer, up by 1.1 per cent. At the other end of the spectrum, the Nifty Realty is the weakest today by losing about 0.5 per cent.
Broadly speaking, the sentiment appears to be tilted to the upside, at least with respect to Nifty 50.
Nifty 50 futures
The January futures of the Nifty 50 index opened slightly higher at 18,112 versus yesterday’s close of 18,088. It is currently trading at 18,140.
The price action indicates that the contract has more room on the upside with nearest resistance at 18,200. Subsequent resistance is at 18,270.
On the downside, from the current level, the supports are seen at 18,100 and 18,070. Support below these levels is at 18,000.
Trading strategy
Traders can go long on Nifty futures at the current level of 18,140. Add more longs if the price dips to 18,100. Place stop-loss at 18,060.
When the contract touches 18,200, tighten the stop-loss to 18,120. Exit the longs at 18,250.
Supports: 18,100 and 18,070
Resistance: 18,200 and 18,270