Tuesday, August 3, 2010

TURNING POINTS FOR 04.08.2010


NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
CRITICAL LEVELS:
Level 1: 5365, Level 2: 5225 and Level 3: 4800
NIFTY FUTURE :
In today's trading, Nifty Future opened firm on the back of firm closing in US Markets yesterday. However, immediately after opening, Nifty Future traded listlessly for the remainder of the day. Noteworthy point for today was that Reliance remained firm throughout the day and along with Bank stocks helped Nifty Future remain firm. Another point to note is that Nifty Future traded within the range of the last bar formed in yesterdays trading and could not go above yesterday's high level except in the opening few minutes - so much to give you an idea of the market strength. Though Bank Nifty has done well for the past few days, one needs to be cautious, as it is getting close to previous high of 10806 to make a double top - which itself can be a good resistance level.
Considering today's lackluster performance in spite of good cues from global markets, suggests that the market lacks strength. If you see the weekly chart, you will observe that for the past two weeks, Nifty Future is showing a sideways trend - though a new high of 5476 has been formed on 23.7.2010 - a Gann turn date.
As today's close is near the high of the day, tomorrow opening could be firm but considering the sluggish performance today, I wonder whether we can expect the market to make a new high?
In light of the above, I do not see much sense in having new long positions. Existing long positions should be trailed with stop loss of 5400 and not 5350 - since every one is having that level as a stop loss and market may just not give an opportunity to sell at that level.
Selling Nifty Future should be considered below 5400 with stop loss of 5430. On the down side it will have support at 5365. In case of close below 5365, it would be better to trail the short position and also a first indication to suggest that All is not Well.
Put Call Ratio of Index Options increased to 1.19 as against 1.11 yesterday.
Please do not trade without STOP LOSS.
With Best Wishes,
Ketan Asher.

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