Nifty Active Call: Sell on decline below 10,830 levels

Nifty 50 January Futures (10,859)

The bullish momentum extended in today's session as well and both the Nifty as well Sensex started the session with a gap-up opening. The Asian markets which started with positive cues, show mixed trends. The Nikkei 225 is down 104 points to 23,763 levels while Hang Seng index is up by 171 points to 32,154 levels.

The strong rally in the domestic indices is backed by good gains from the Banking and FMCG sectors while the Nifty mid-cap and Small-cap indices are hovering in the negative territory witnessing selling pressure. The Nifty January futures contract started the session with a gap-up open at 10,865 and recorded an intra-day high of 10,873.

However, the contract is trading at about 20 points discount to the underlying Nifty index, which calls for caution. The market breadth of the Nifty index is almost even. The contract has marked an intra-day low at 10,829 and has been moving sideways. Traders with a near-term perspective should tread with caution and can consider taking profit off the table at this juncture.

A strong fall below the immediate base level of 10,830 will be cue for initiating short positions with a stop-loss at 10,840 levels. The contract can test next supports at 10,800 and 10,780 levels. On the other hand, key resistances are placed at 10,873 and 10,895 levels.

Strategy: Tread with caution and consider selling the contract only on decline below 10,830 levels with a stop-loss at 10,840.

Supports: 10,830 and 10,800

Resistances: 10,873 and 10,895

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