Nifty 50 January Futures (23,265)

Nifty 50 is continuing with its attempt to bounce. But the price action indicates that strong buyers are not available in the market to take the index higher. If also reflects the lack of confidence and the dominance of fear of seeing more fall.

Nifty is currently trading at 23,215, up by 0.17 per cent. The advances/declines ratio is at 27:23. This is not a very bullish sign. If the ratio tilts in favour of the declines, then index can fall back during the day. So, we may have to wait and watch cautiously.

Nifty 50 outlook

Nifty has strong resistance in the 23,300-23,350 region. An intraday rise to test this resistance is likely during the day. But can the index breach 23,350? That will have to be watched.

Failure to breach 23,350 can drag the Nifty down to 23,200-23,150 – an important intraday support. A break below 23,150 can take it further down to 23,000.

On the charts, the region around 23,350 is a strong resistance. So, we expect it to cap the upside and drag the index down going forward.

Nifty 50 Futures

Nifty 50 January Futures (23,265) is trading flat. The contract has been stuck in between 23,200 and 23,350 since the beginning of this week. A higher resistance is at 23,400. So 23,200-23,400 can be the broader trading range.

A strong rise above 23,400 is needed to turn the outlook bullish. Only then a rise to 23,500-23,600 will come into the picture. As long as the contract stays below 23,400, it will remain vulnerable to break 23,200. That break can drag the Nifty 50 January Futures down to 23,000 in the coming sessions.

Trade Strategy

The broader trend still remains down. So, we expect the Nifty 50 January Futures contract to fall after some consolidation or a slight rise from here.

Traders can go short on a break below 23,200. Keep the stop-loss at 23,240. Trail the stop-loss down to 23,160 as soon as the contract falls to 23,130. Move the stop-loss further down to 23,090 when the contract touches 23,060. Exit the short positions at 23,030.

Supports: 23,200, 23,200

Resistances: 23,350, 23,400