Nifty 50 December Futures (18,679)
Sensex and Nifty 50 have come down sharply from their day’s high after the Reserve Bank of India’s monetary policy outcome. The Sensex is trading down 0.33 per cent and Nifty lower by 0.4 per cent. Nifty fell sharply below the key level of 18,600 and currently hover around 18,572. Inability to bounce-back above 18,600 can keep it under pressure to test 18,500 during the day.
Global cues
The Asian markets are mixed. Nikkei 225 (27,721) and Kospi (2,391) are down by 0.59 and 0.09 per cent, respectively. Hang Seng (19,677) is up sharply by 1.18 per cent and Shanghai Composite (3,215) is up 0.15 per cent.
In the US, the Dow Jones Industrial Average (33,596) fell sharply over a per cent for the second consecutive day. It will have to be seen if it can sustain above 33,500 level. A strong break below it will see the current fall extending up to 33,200 and 33,000 before a reversal taking place.
Nifty 50 Futures
The Nifty 50 December Futures (18,679) is down 0.49 per cent. The contract is struggling to gain momentum to break above the resistance at 18,800. Key intraday resistance is at 18,750
The immediate support is at 18,650. A break below it can drag the contract down to 18,600. The level of 18,600 is a strong support from where the contract can see a bounce.
Trading Strategy
Considering the risk-reward ratio, we see that the current levels are not comfortable for taking short positions although there is room for a fall. However, we suggest traders to wait for dips and go long at 18,630 and 18,610. Keep a stop-loss at 18,580. Trail the stop-loss up to 18,640 when the contract moves up to 18,680. Move the stop-loss further up to 18,670 when the contract touches 18,700. Book profits at 18,710.
Supports: 18,650, 18,600
Resistances: 18,750, 18,800