NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE:
After a firm opening, Nifty Future remained in a narrow range despite it being a FNO settlement day. As mentioned yesterday, lack of participation by Reliance and SBI turned out to be hurdles for Nifty Future going up. Once again, it was Infosys which helped Nifty Future remain buoyant. During the day, Nifty Future traded in just 38 point range with high of 6106 and low of 6068 and closed firm at 6103.
While Nifty Future appears to be gaining strength, lack of participation by key stocks like Reliance & SBI makes the up move looks unsustainable. On the EOD chart, I have highlighted a wedge like formation, which shows that Nifty Future will become weak once it falls below 6030.
For today long position may be taken if Nifty Future trades above 6111 with a stop loss of 6080. On the higher side, it will find resistance at 6125 - 6175 and major hurdle at 6210.
I would advise extreme caution at higher levels and it will be best to avoid fresh long positions today - particularly as participation may be low, in view of people being in celebration mood. Existing long positions may be trailed with a stop loss of 6060.
Short position may be taken either at 6175 with strict stop loss of 6211 or at lower levels when Nifty Future breaks 6060 levels. On the downside, it will find support at 6030 - 5970 - 5940 and 5900.
While we are likely to end the year with about 16% increase in Nifty Future, the quarterly candle is likely to be a doji - indicating indecision about the future direction. Considering that we have already run up quite a bit, one needs to protect the long positions with care.
Put Call Ratio of Index Options decreased marginally to 1.03 as against 1.09 on the previous day.
Please do not trade without STOP LOSS.
WISHING YOU ALL THE VERY BEST FOR 2011.
Ketan Asher.
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