nifty future trading

Nifty future are index futures where the underlying is the S&P CNX Nifty index. In India, index futures trading commenced in 2000 on the National Stock Exchange (NSE).

In Nifty technically the market is in a typically sideways zone with 5480 as a strong support zone to work with and 5670 as a strong resistance zone to work with.It is looking bullish in the coming trading session if it manages to trade above the Resistance level of 5670 else below the support level of 5480 it would be down trend.

A 'Future' is a contract to buy or sell the underlying asset for a specific price at a pre-determined time Thus it is forward contract which is a derivative type of instrument, share tips in which buyer and the seller are agreed to transact set of financial instrument/ Physical commodities for future at a particular price i.e. if you buy a futures contract, that means you promise to buy something that a seller has not yet produced at a particular price and specific time.

If you are entering in future market it is not compulsory that you will have to liable for receiving any delivery (in case of commodities). This is why futures contracts are known as financial instrument.

According to the trading system that I follow, when a resistance point gets broken in a convincing manner, the same level becomes a support point. So I went long above 5469. However after a few minutes of staying above this band, the price began to fall. Negative news flow regarding ONGC helped in this cause.

As far as options trading goes it always pays to be well aligned with the long term market trend. In the short term the market may flip - flop between bullish and bearish market causing the option values to fluctuate widely. However if an investors position is well aligned with the long term trend then he need not worry about these short term fluctuations. One of the indicators of the long term trend is NIFTy future values. If the NIFTY index is being traded at a discount in the futures market then the long term trend in bearish. On the other hand if the NIFTY index is being traded at a premium in the futures market then the long term trend in bullish.