TURNING POINTS FOR 17.09.2010

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE :

Contrary to my expectations, Nifty Future made a new high, that too post RBI policy announcement but gave up all the gains by the end of the day, to leave EOD candle as a Shooting Star - suggesting bearishness below today's low of 5826. There is one more mathematical reason (though a bit premature) that suggests that today's high of 5916 should stay for some time now. As indicated yesterday, I will not bother you with the maths today, but leave it as a riddle - with a hint that anyone who prepares the TURNING POINTS GRID as suggested in the 'simple trading idea' which I have put in public domain for some time now, can get the answer and comparing it to 2010 Opening price of 5225. Those who have still not got the write-up may do themselves a favour and send me an email and I will send the write-up by return mail. The only reason for leaving it this way is, that some of the readers may see the merit of a simple ideas.

Coming to the tomorrow's market movement, I continue to believe that the risk reward ratio for fresh long positions is a quite adverse and hence it is best avoided. For tomorrow, if market trades below 5800, one can go short with stop loss of 5830. Alternatively, if market pulls back up to 5885, one can go short with stop loss of 5920 (though looks unlikely). On the down side it will find support at 5750-5725 levels and try to bounce back - in view of Trend Line support on the EOD chart. Once this trend line is broken, one need not rush to square up the short positions but would do well to trail it with stop loss.

Tomorrow being the last trading day of the week any close below 5750 should be considered bad for the next week. This is getting reflected in the Put Call Ratio of Index Options as it inched up to 1.23 as against 1.02 yesterday.

Please do not trade without STOP LOSS.

With Best Wishes,

Ketan Asher.

PS: Sentence in Blue added as an after though to make it complete.