Nifty 50, the benchmark index, opened today’s session with a gap-down at 22,433 compared to yesterday’s close of 22,545. It further declined after opening and is currently at 22,280, down nearly 1.2 per cent.
The advance/decline ratio stands at 7/43, showing a strong downward bias. Coal India, up 2.6 per cent, and Tech Mahindra, down 5 per cent, are the top gainer and loser respectively in Nifty 50.
Like the benchmark indices, all mid- and small-cap indices are in the red. Moreover, all sectoral indices too are down, indicating a broad-based selling.
Given the prevailing conditions, Nifty 50 can drop further today and consequently, Nifty futures too might see more decline.
Nifty 50 futures
The March futures of Nifty 50 began today’s session lower at 22,532 versus yesterday’s close of 22,683. It is now trading at 22,440, down 1.1 per cent.
From the current level, the contract might rise to 22,490-22,500 price band. However, it will most likely resume the downtrend.
The nearest notable support from the current level of 22,440 can be spotted at 22,200 and 22,000. That said, a fall to these levels might not happen today wherein Nifty futures could drop over next few sessions.
In case Nifty futures break out of 22,500, there is another resistance at 22,580. A breach of this can turn the intraday outlook, potentially leading to a rally to 22,700. However, given the current chart set up, such an up move is less likely to happen.
Trading strategy
Short Nifty futures now at 22,440 and 22,490. Place a stop-loss at 22,580. When the contract drops to 22,300, tighten the stop-loss to 22,420. Exit at 22,200.
Supports: 22,200 and 22,000
Resistance: 22,500 and 22,580
