NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE:
We started the day with a firm opening which could not sustain and in the first few hours went straight down to test yesterday's low to make a higher bottom at 5712 and remained sideways for an hour or so. As yesterday's low was not breached, in the second session we saw a sharp up move which went past yesterday's top to make the day's high at 5885 and closed firm at 5874. Needless to add that since US markets are firm at the time of writing this post, we can certainly expect to see a firm opening tomorrow.
I am sure everyone would like to believe that the worst is over. Hence, I would like to highlight a few points briefly - even at the risk of sounding like a devil's advocate :
1. The credit for the sharp pull back - that too twice, goes to the strength of the support line which I have been showing on the chart for a few day's now and not necessarily to the strength of the market.
2. Oscillators on the EOD chart do not suggest a fresh up move from here. A fresh move requires a different type of set up which is not reflected as of today.
3. As we have started the year just a few day's back our starting point itself is at 6200, hence strength on the Annual chart will be generated only above that level. For reference, see Jan 2008 chart period.
4. After such a steep fall of 500 points over the past 7 days, a strong up move is normal. A bullish candle on the Weekly chart is a better indicator for a trend change. In any case we are just in the 2nd week of a down move.
5. Those having access to the charts should draw a Neck line connecting low at 5727 and the recent low at 5700. I will deal with it seperately in my weekend post.
While one should play the trend as it emerges, I hope the above reasoning helps the reader from not going overboard on a full throttle.
The top for the day, is just at the trend line on the weekly chart, which normally acts as a resistance. But looking at the close, it is likely that we will cross the same tomorrow. Fresh long position may be taken with stop loss of 5840 and danger exists only below 5800. On higher side, we have resistance at 5900 - 5925 - 5960 and major hurdle at 6000.
As indicated over the past two days, shorts should be avoided at lower levels and I hope the readers have covered the same either at lower levels - because yesterday's low was not breached or at 5812 weekly mid point on TP Grid or at 5850 as given in yesterday's post. Short position should be considered around 6000 levels only and not earlier.
Put Call Ratio of Index Options decreased marginally to 1.10 as against 1.16 yesterday.
Please do not trade without STOP LOSS.
With Best Wishes,
Ketan Asher.
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