TURNING POINTS FOR 05.02.2010

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE :

In today's trading, Nifty Future could not cross the trend line which acted as resistance yesterday. It opened lower and after remaining side ways during the 1st half of the day, it broke the stop loss level of 4875 given yesterday. It went down to make low of 4824 and closed @ 4834. As we have closed near the low of the day, tomorrow's opening could be weak.

For tomorrow's trading one can go short below 4800 with a strict stop loss of 4835. On lower side it will find support at 4770 and could bounce back. In the event, previous low of 4757 is broken it will find support at 4680 and thereafter major support at 4600. If at all this level is reached, it would be a good idea to buy 5000 Call Option, in light of the possible pre budget rally.

Long positions should be taken if Nifty Future crosses above 4850, with 4820 as the stop loss. On higher side, it will find resistance at 4880 - 4920 - 5000.

Another interesting feature for tomorrow is that it is 180th day from the gap open post Election results and i have also drawn an ellipse on the price bars so as to cover/touch maximum no. of trading bars. Hope u will find it interesting to see it on the EOD chart. Do these things, coupled with today i.e. 4th February being Gann turn date, indicate that we will form a bottom tomorrow before the pre-budget rally starts? Lets stay tuned to the market tomorrow to find out.

Put Call Ratio of Index Options increased to 1.05 as against 0.99 yesterday.

What ever may be your view please do not forget to use STOP LOSS, while trading.

With Best Wishes,

Ketan Asher.