Nifty 50, the benchmark index, opened today’s session with a gap-down at 23,319 compared to last week’s close of 23,482. The index is currently trading at 23,260, down 0.9 per cent.

The local market is taking bearish cues from the Asian equity market. Major indices like Nikkei 225 (38,470), ASX 200 (8,370), Hang Seng (20,070) and KOSPI (2,440) have lost between 0.8 and 3 per cent so far today.

Apart from the above, the advance/decline ratio of Nifty 50, currently at 14/37, is showing a clear bearish inclination. ITC Hotels, up nearly 5 per cent, is the top gainer whereas Bharat Electronics, down 5.8 per cent, is the top loser.

Like the benchmark index, mid- and small-cap indices too have lost today. Also, barring Nifty Consumer Durables (up 0.6 per cent), all other sectors are in the red. Nifty Oil & Gas and Nifty Metal, down 2.5 per cent each, are the top losers.

The above factors indicate a broad-based selling. Therefore, the likelihood of further intraday decline in Nifty 50 and Nifty futures is high.

Nifty 50 futures

The February futures of Nifty 50 began the session lower at 23,390 versus last week’s close of 23,556. It is now trading around 23,350, down 0.9 per cent.

Though there is a strong downward bias in Nifty futures, it should be noted that there is a support at 23,320. If this level is breached, the sell-off can intensify where the contract can drop to 23,150 quickly. A break below 23,150 can drag Nifty futures to 23,000.

On the other hand, if Nifty futures rally by taking support at 23,320, it can reach 23,500, a resistance. Subsequent barrier is at 23,650.

Trading strategy

Although there is a bearish tilt, Nifty futures has a support ahead. So, traders can short Nifty futures if it breaks below 23,320. Target and stop-loss for intraday can be 23,150 and 23,400 respectively.

Supports: 23,320 and 23,150

Resistance: 23,500 and 23,650

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