NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE :
In sympathy with the weakness in the World markets, we too opened with a downside gap to make new low at 5438 and recovered without much conviction and lot of volatility, to make the days high at 5545 and closed the day at 5524.
In sympathy with the weakness in the World markets, we too opened with a downside gap to make new low at 5438 and recovered without much conviction and lot of volatility, to make the days high at 5545 and closed the day at 5524.
The worrying factors are :
1. Nifty Future unable to go above 5555 mentioned yesterday. Longer it remains below it, the down side remains a serious concern.
2. As mentioned in my weekly post, Infosys too has broken out of the channel and is below 3150 indicating more down side possible and consequently, restricting the possibility of strength returning in Nifty Future.
The hesitation with which market traded today, makes it obvious that there is crisis of confidence amongst the market players due to the possibility of more down side. On the EOD chart, I have drawn a rounding top with a trend line at 5400. This when broken decisively, indicates a target of 4500. Similar to what I have been showing on the Weekly chart for a few weeks now - with possibility of Right Shoulder formation, which can take Nifty Future to about 4400 levels. Needless to say that at today's confidence level, everything seems a possibility.
For tomorrow, I would consider going long only above 5555 with strict stop loss of 5510. On the higher side 5620-5640 and 5675 remain major hurdle.
While I do remain optimistic of a pull back, considering the fragile condition of the market, short position may be considered below 5500 with stop loss of 5555.
Put Call Ratio of Index Options decreased to 0.96 as against 1.10 on the previous trading day.
In such volatile times, it makes sense to trade in options and if you can't resist the temptation of futures trading - please do not forget to use stop loss.
In nut shell - bias remains positive above 5555 and negative below it.
With Best Wishes,
Ketan Asher.
PS: I have updated the Nifty Future Monthly chart as of 31.01.2011, for the readers to see a Strong & Red monthly candle of 772 points, which will be seen by many market players as a sign of impending bearishness.
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