Nifty 50, the benchmark index, opened today’s session with a gap-down at 22,821 compared to yesterday’s close of 22,933. The index is currently hovering around 22,830, down 0.4 per cent.
Although the index is down, the advance/decline ratio stands at 29/21, a positive sign. Shriram Finance and Hindalco top the charts in Nifty 50 by advancing 2 per cent each. Maruti Suzuki, down 1.9 per cent, is the top loser.
Even as the benchmark index is slightly down in the early trade today, mid- and small-cap indices are in the green.
Among the sectors, Nifty Metal, up 1 per cent, is the top performer whereas Nifty Financial Services, down 0.7 per cent, is the top loser.
Broadly, there seems to be a bearish bias in Nifty 50 even as its breadth shows positive inclination now.
Nifty 50 futures
The February futures of Nifty 50 began today’s session lower at 22,895 versus yesterday’s close of 22,965. It is now trading at 22,860, down 0.4 per cent.
The price action indicates that the contract is likely to decline further. Nevertheless, there is support at 22,840. If this level is breached, Nifty futures can drop to 22,700 quickly.
On the other hand, if the contract moves up from the current level of 22,860, there is a resistance at 23,080, which can cap the upside. But if this is breached, Nifty futures can rally to 23,300.
That said, the chart shows that Nifty futures has been oscillating in the range of 22,840-23,080. The direction of the break of this price band will lend us clues about the next leg of the trend.
Trading strategy
Despite the bearish bias seen on the chart, we suggest traders stay out.
Short Nifty futures if it breaks the support at 22,840. For intraday, target and stop-loss can be 22,700 and 22,920 respectively.
Supports: 22,840 and 22,700
Resistance: 23,080 and 23,300
