Taking cues from the positive global markets, the domestic benchmark indices - the Sensex and the Nifty began the session on a positive note. But, the indices remain choppy and trade in a narrow range with a negative bias. The US markets closed on a positive note last session, the Dow Jones advanced 1.5 per cent and S&P 500 surged 1.3 per cent. The Asian markets also advanced more than 1 per cent in today's session. The Nikkei 225 gained 1.3 per cent to 21,144 and Hang Seng Index increased 1.2 per cent to 28,503 levels. The Nifty February month futures began the session at 10,886 and moved higher to mark an intra-day high at 10,905. However, after testing the key resistance at 10,900, the contract declined to record an intra-day low of 10,862. The contract is trading range bound in the band between 10,860 and 10,900. Traders should tread with caution as long as the contract is range-bound.
An upside break of this band can bring buying interest and take the contract higher to 10,925 and then to 10,950 levels. Traders with a short-term view can consider taking long positions with a fixed stop-loss on a strong break above 10,900 levels. On the other hand, a decisive fall below 10,860 will reinforce the bearish momentum and drag the contract down to 10,830 and 10,800 levels. A further slump below 10,800 will pull the contract lower to 10,775 and 10,750 levels over the short term. Traders can initiate fresh short positions on a decisive fall below 10,860 levels with a fixed stop-loss.
Strategy: The contract is range-bound between 10,860 and 10,900. Tread with caution.
Supports: 10,860 and 10,830
Resistances: 10,900 and 10,925
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