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Nifty 50 February futures (21,906)
Nifty 50 has risen back well in the opening trades after witnessing a sharp fall towards the end on Monday. The index is currently trading at 21,866, up 0.44 per cent.
Nifty is currently getting support in the 21,750-21,700 region. On Monday, it had struggled to rise past 21,950 decisively. So, it is important for the Nifty to get a sustained rise above 21,950 in order to move further up towards 21,100-21,150 in the coming sessions. Else it can remain stuck in between 21,700 and 21,950. Failure to rise past 21,950 can keep the Nifty under pressure to break 21,700. Such a break will be bearish, leading to 21,500 and lower levels going forward.
Global indices
Asian markets are trading mixed. Hang Seng (15,890) and Shanghai Composite (2,724) are up 2.4 and 0.82 per cent respectively. On the other hand, Nikkei 225 (36,203) and Kospi (2,581) are down 0.4 per cent each.
The Dow Jones Industrial Average (38,380.12) fell 0.7 per cent on Monday. It has an important support around 38,100 which had held very well last week. The chances are high for the Dow to sustain above 38,100 and rise to 39,300-39,400 in the coming weeks.
Nifty 50 futures
The Nifty 50 February futures (21,906) are up 0.47 per cent. However, intraday resistance is in the 21,930-21,960 region. Failure to break above this resistance can drag the Nifty 50 February futures contract down to 21,800. A further break below 21,800 can drag it down to 21,700-21,600 in the next few days.
A strong rise above 21,960 will negate the above-mentioned bearish view. That will clear the way for a fresh rise to 22,100-22,200.
Our preference is to see the Nifty to remain below 21,960 and fall to 21,800 and lower going forward.
Trading strategy
Go short on a rise at 21,930 and 21,950. Keep the stop-loss at 21,990. Trail the stop-loss down to 21,910 as soon as the contract falls to 21,880. Move the stop-loss further lower to 21,870 when the contract touches 21,845. Exit the shorts at 21,820.
Supports: 21,800, 21,700
Resistances: 21,960, 22,100
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