Nifty 50 December Futures (23,796)

Nifty 50 is witnessing some recovery after a sharp fall last week. The index opened with a gap-up and is now trading at 23,753, up 0.7 per cent. The advances/declines ratio is at 37:13. It is important to see if this is sustaining or not.

Nifty 50 Outlook

Nifty has resistances at 23,800 and then in the 24,000-24,100 region. A strong rise above 24,100 is needed to turn the outlook bullish. A reversal either from 23,800 itself or from the 24,000-24,100 region can drag the index down to 23,500 or 23,300 this week.

Nifty 50 Futures

The Nifty 50 December Futures (23,796) is up 0.72 per cent. The contract has resistance at 23,900 and then at 24,100. A strong break above 24,100 is needed to ease the downside pressure and turn the outlook bullish. Only then the rise to 24,500 and higher levels will come into the picture.

A reversal from 23,900 or 24,100 will keep the downtrend intact.  It can then drag the contract down to 23,600 or 23,300 in the coming days.

Trade Strategy

The bounce could just be a corrective rise within the ongoing fall. So, we suggest traders to wait for a rise and go short at 23,870. Keep the stop-loss at 23,930. Trail the stop-loss down to 23,830 as soon as the contract falls to 23,790. Move the stop-loss further down to 23,770 when the contract falls to 23,740. Exit the shorts at 23,710.

Supports: 23,600, 23,300

Resistances: 23,900, 24,100