TURNING POINTS FOR 04.11.2009

Charts : SBI - SAIL - RELIANCE

Charts: MARUTI - ICICI BANK - NIFTY FUTURE EOD

NIFTY FUTURE 30 MIN
TURNING POINT GRID FOR 04.11.2009, PLEASE REFER TO SEPARATE POST BELOW.

NIFTY FUTURE:

In today's trade Nifty Future started near previous day's levels and made high of 4735, till then giving an impression that it has now found a bottom. However, in the second half of the day, after opening of European markets, Nifty Future lost about 175 points to end the day near the lows. While Advance Decline was bad though out the day, the fall was precipitated by front line stocks like Reliance, SBI, Infosys etc.

I had indicated the levels of 4500 to be seen sometime during the week, but we are almost there today itself. Once again it has been proved that market has a law of its own - In the last 10 days of persistent fall from the top, only one day has seen a positive close.

While there is nothing to suggest that it may not continue to fall tomorrow, except that 50% levels should hold the fall at least temporarily and we should see a pull back from these levels.

I would not recommend any sell position at these levels - I know i said it yesterday when Nifty Future was higher by 200 points, as the pullback can be equally sharp.

In these circumstances Nifty Future/Stock Futures should be bought along with protective put option as a measure of abundant caution. Buying in cash in small lots will be a better proposition. On the lower side we have 4388 as 61.8% correction level. Nifty future will gain strength only above 4654 and face resistance at 4680 and 4750.

While i do not expect the correction to be deeper, i would like to highlight that the above Fib ratios of 50% & 61.8% are with respect to 3905 low. If we are to calcluate 38.2% & 50 % levels from 2525.25 the same will be 4157 & 3845 respectively.

Put Call ratio of Index Options remained unchanged at 0.94, thus indicating that the collective wisdom of the market also expects to see a smart pullback very soon.
Please do not trade without using STOP LOSS.

With Best Wishes,

Ketan Asher.

Words of Wisdom

The way to keep young is to keep your faith young,

keep your self-confidence young, and

keep your hope young.