TURNING POINTS FOR 26.02.2010

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE :

We had one more day of trading when Nifty Future could not move out of the range. Though it went lower than the previous 2 days, it closed near the high of the day at 4860.

Tomorrow is an important day for the market but how to trade for tomorrow is the most difficult question to answer, as the market may change course many times during the day, depending upon FM's announcements and peoples instant reactions to the same. Ideally, it would be better to spend your time understanding the longer term implications of the Budget proposals than to try and make a quick buck as the risk reward ratio will be totally against the day trader.

I would say that above 4920 and more so above 4950 Nifty future can be expected to flare up to 5200. In the event of some unfavourable announcements, on the down side it will slide fast below 4800 and can go right up to the previous low near 4650.

I would consider the markets very weak only if it closes below 4650, hence it will be better to make delivery based buying in the event of a steep fall - rather than panic. If Nifty Future bounces from the previous bottom, it should be considered a big positive for the market, as it would have made double bottom and hence buy on declines would turn out to be a more rewarding strategy.

Put Call Ratio of Index Options almost remained unchanged at 0.97 as against 0.98 on the previous day.
It would be better to trade tomorrow in the options than in Futures as you can control the risk easily and for God's sake please do not forget to put STOP LOSS.
With Best Wishes for an eventful day,
Ketan Asher.
PS: Please note that after such a Big day, we have a three day holiday, so what ever may be your view on the market - please think 10 times before leaving open Futures positions irrespective of the direction.

Words of Wisdom

Money saved is money earned.