Nifty 50 January Futures (23,462)

Nifty 50 is under pressure. The index has declined sharply today breaking below the key support level of 23,500. It is currently trading at 23,370, down 0.67 per cent. The advances/declines ratio is at 9:41. This clearly indicates that the bias is negative. So, there are good chances to see more fall during the day.

Nifty 50 outlook

The outlook is negative. The break below 23,500 has turned the short-term view bearish. However, there is an intraday support near current levels at 23,350. A corrective bounce from there to 23,450-23,500 is a possibility. However, as long as the index stays below 23,500, the outlook will continue to remain negative. As such the index can break below 23,350 eventually. Such a break can take the index down to 23,250 first and then even lower.

In case, the index fails to bounce from around 23,350, then the fall to 23,250 can happen straight away.

Nifty 50 Futures

The Nifty 50 January Futures (23,462) is down 0.8 per cent. The contract has declined sharply breaking below the support at 23,600. The outlook is bearish. The contract can fall to 23,300 from here.

Any intermediate bounce will be capped by the 23,550-23,600 resistance zone.

Trade Strategy

Traders can go short now at 23,462. Add more shorts on a rise at 23,540. Keep the stop-loss at 23,620. Trail the stop-loss down to 23,430 when the contract falls to 23,405. Move the stop-loss further down to 23,380 when the contract touches 23,355. Exit the short positions at 23,310.

Supports: 23,300, 23,200

Resistances: 23,550, 23,600