Nifty January futures faces a barrier at 23,425; a breakout can lift it to 23,625
Nifty 50, the benchmark index, opened today’s session with a gap-up at 23,377 versus yesterday’s close of 23,213. The index is currently trading at 23,310, up 0.4 per cent.
The advance/decline ratio of Nifty 50 now stands at 33/17, a bullish indication. HDFC Life, up about 10 per cent, is the top gainer. Tata Consumer Products, down 2.3 per cent, is the top loser.
The mid- and small-cap indices are in the green today, in line with the benchmark. In addition, most of the sectors are up in the early trade today, a positive indication.
Nifty PSU Bank and Nifty Realty, up 3.3 per cent and 2.5 per cent, are the top gainers.
The overall bullishness is further substantiated by major Asian equity markets since morning. Major indices like Nikkei 225 (38,550), ASX 200 (8,320), Hang Seng (19,350) and KOSPI (2,525) have advanced between 0.5 per cent and 1.4 per cent so far today.
Nifty 50 futures
The January futures of Nifty 50 began the session higher at 23,406 versus Friday’s close of 23,266. It is now trading around 23,380, up about 0.5 per cent.
Although the price action appears bullish, the contract has an intraday resistance at 23,425. If this level is breached, Nifty futures can rally to 23,625, a resistance. Subsequent resistance is at 23,800.
On the other hand, if the contract falls from the current level, it can drop to 23,250. Support below 23,250 is at 23,120.
Trading strategy
Buy Nifty futures if it breaks out of 23,425. Target and stop-loss can be 23,625 and 23,350 respectively.
Supports: 23,250 and 23,120
Resistance: 23,425 and 23,625