AS SAID YESTERDAY INDIAN MARKETS OPENED GAP DOWN, FOLLOWING THE GLOBAL CUES, AND WITNESSED A RELIEF RALLY IN AFTERNOON TRADE. AT ONE POINT OF TIME MARKET TURNED GREEN WITH BROAD BASE RECOVERY AS THE EUROPEAN MARKETS OPENED ON FLAT TO POSITIVE NOTE AND US FUTURES SHOWED A SHARP RECOVERY, HOWEVER THE RECOVERY WAS SHORT LIVED AND THE MARKETS ONCE AGAIN PLUNGED ON BACK OF VOLATILE GLOBAL MARKETS. NIFTY MANAGED TO CLOSE AT 5072.85, DOWN 45.65 AND SENSEX CLOSED AT 16857.91, DOWN 132.27.
FIIs WERE NET SELLERS, MARKET BREADTH WAS VERY WEAK AND MID-CAP & SMALL-CAP INDEX CLOSED IN RED. METAL & I.T. SECTORS WERE MAIN LOSERS.
AT THE TIME OF WRITING, THE FED HAS PLEDGED TO KEEP THE BENCH MARK INTEREST RATE AT A RECORD LOW (0% TO 0.25%)THROUGH MID 2013 AND PREPARING TO EMPLOY MORE APPROPRIATE TOOLS TO BOLSTER ECONOMY. NO DECLARATION OF QE3 WAS MADE. THIS OPTIMISM TRIGGERED A CORRECTIVE RALLY IN DOW, NASDAQ & S&P, WHICH ENDED AT 11239.80(UP 429.92), 2482.52(UP 124.83) & 1172.53(UP 53.07) RESPECTIVELY. THIS COULD TRIGGER A CORRECTIVE RALLY IN INDIAN MARKETS TODAY AS BREACHED BELOW $80.
NIFTY HAS SHOWN VERY VOLATILE MOVEMENTS FOR THE LAST TWO-THREE DAYS. NOW THE SHORT TERM CRUCIAL SUPPORT FOR THE NIFTY LIES AT 4940-4950. IF THE NIFTY BREACHES 4940-50 LEVELS THE DOWNWARD MOVEMENT WILL CONTINUE AND NIFTY MAY TEST 4720-4700. AS SAID EARLIER ALSO, LEADING INDICATORS (LIKE STOCHASTIC & RSI) ARE GIVING OVERSOLD SIGNAL OF NIFTY. SO SOME PULLBACK RALLY TO 5200-5250-5300 CANNOT BE RULED OUT.
FOR TODAY NIFTY HAS SUPPORT AT 5035 AND RESISTANCE AT 5110. IF NIFTY BREACHES 5035(Chances of which are less) THEN NIFTY COULD TEST 4990 & 4940.HOWEVER ON THE HIGHER SIDE BREAK ABOVE 5110(Chances of which are more), NIFTY COULD TEST 5150 & 5180.
BEST STRATEGY FOR THE OPTION PLAYERS/SPECULATORS:
1. BUY CE5000 & PE5100: KEEP BOOKING PROFITS IN THE RANGE OF 5035 TO 5110.(As the nifty will be in a range with huge volatility, with upward bias). HOW TO INITIATE A TRADE??? See the opening of the markets if it is gap up then buy PE5100 around resistance level and sell when Nifty drift lower around support level/open level, similarly buy CE5000 around support level and book profit when Nifty inches higher around resistance level & vice-verse if Nifty opens with gap down.
2. SELL PE4600 AROUND 40-45 & SELL CE5500 AROUND 20-22: AS THE BROAD RANGE OF THE NIFTY WILL BE 4600 TO 5500 FOR AUGUST SERIES, BOTH CALL & PUT WILL DECAY THE PREMIUM AND WILL BECOME ZERO BY EXPIRY OF THE SERIES.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.Nothing in this article is, or should be construed as, investment advice.
Disclaimer:
This is neither an offer nor a solicitation to purchase or sell securities. The information and views contained on this blog are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in, or have positions in the securities mentioned in their articles. Neither I (Vikas Srivastava) nor any of the contributors accepts any liability arising out of use of the above information/article. Reproduction in whole or in part without written permission is prohibited.
FIIs WERE NET SELLERS, MARKET BREADTH WAS VERY WEAK AND MID-CAP & SMALL-CAP INDEX CLOSED IN RED. METAL & I.T. SECTORS WERE MAIN LOSERS.
AT THE TIME OF WRITING, THE FED HAS PLEDGED TO KEEP THE BENCH MARK INTEREST RATE AT A RECORD LOW (0% TO 0.25%)THROUGH MID 2013 AND PREPARING TO EMPLOY MORE APPROPRIATE TOOLS TO BOLSTER ECONOMY. NO DECLARATION OF QE3 WAS MADE. THIS OPTIMISM TRIGGERED A CORRECTIVE RALLY IN DOW, NASDAQ & S&P, WHICH ENDED AT 11239.80(UP 429.92), 2482.52(UP 124.83) & 1172.53(UP 53.07) RESPECTIVELY. THIS COULD TRIGGER A CORRECTIVE RALLY IN INDIAN MARKETS TODAY AS BREACHED BELOW $80.
NIFTY HAS SHOWN VERY VOLATILE MOVEMENTS FOR THE LAST TWO-THREE DAYS. NOW THE SHORT TERM CRUCIAL SUPPORT FOR THE NIFTY LIES AT 4940-4950. IF THE NIFTY BREACHES 4940-50 LEVELS THE DOWNWARD MOVEMENT WILL CONTINUE AND NIFTY MAY TEST 4720-4700. AS SAID EARLIER ALSO, LEADING INDICATORS (LIKE STOCHASTIC & RSI) ARE GIVING OVERSOLD SIGNAL OF NIFTY. SO SOME PULLBACK RALLY TO 5200-5250-5300 CANNOT BE RULED OUT.
FOR TODAY NIFTY HAS SUPPORT AT 5035 AND RESISTANCE AT 5110. IF NIFTY BREACHES 5035(Chances of which are less) THEN NIFTY COULD TEST 4990 & 4940.HOWEVER ON THE HIGHER SIDE BREAK ABOVE 5110(Chances of which are more), NIFTY COULD TEST 5150 & 5180.
BEST STRATEGY FOR THE OPTION PLAYERS/SPECULATORS:
1. BUY CE5000 & PE5100: KEEP BOOKING PROFITS IN THE RANGE OF 5035 TO 5110.(As the nifty will be in a range with huge volatility, with upward bias). HOW TO INITIATE A TRADE??? See the opening of the markets if it is gap up then buy PE5100 around resistance level and sell when Nifty drift lower around support level/open level, similarly buy CE5000 around support level and book profit when Nifty inches higher around resistance level & vice-verse if Nifty opens with gap down.
2. SELL PE4600 AROUND 40-45 & SELL CE5500 AROUND 20-22: AS THE BROAD RANGE OF THE NIFTY WILL BE 4600 TO 5500 FOR AUGUST SERIES, BOTH CALL & PUT WILL DECAY THE PREMIUM AND WILL BECOME ZERO BY EXPIRY OF THE SERIES.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.Nothing in this article is, or should be construed as, investment advice.
Disclaimer:
This is neither an offer nor a solicitation to purchase or sell securities. The information and views contained on this blog are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in, or have positions in the securities mentioned in their articles. Neither I (Vikas Srivastava) nor any of the contributors accepts any liability arising out of use of the above information/article. Reproduction in whole or in part without written permission is prohibited.
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