NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE:
In Tuesday's trading, Nifty Future opened firm and went up to make a high of 5796 and took U turn thereafter and fell sharply. For the readers of this blog, it should have been like a leaked exam paper, as I had anticipated this move, mainly due to the trend line resistance on the EOD chart and I saw a good possibility of such a move due to major announcement coinciding on that day. The day's close has been weak. Tomorrow, holding of the previous low of 5629 is the major factor that will decide the further tone of the market. As I do not know what is in store for us, I will try to enlist both the eventualities.
Option 1: It opens weak and continues to fall and goes below 5629. In that event we have support at 5600 and major support at 5565. I would not be surprised if it bounces from 5565. I would not advise selling at lower levels. Buying may be considered with strict stop loss of 5525.
Option 2: Considering the firmness in US markets, we treat yesterday's fall as an over reaction to the credit policy and get on with the up move (preferably without breaking
Tuesday's low of 5677) to 5850 and 5920. In this scenario, I would suggest buying when Nifty Future moves above 5710 with stop loss of 5675. On the higher side it will find resistance at 5740 and 5800. Expecting the unexpected is the thinking behind considering this possibility. Moreover, I expect Nifty Future to reach at least 5920 in the new settlement before it slips below 5500 for good. This is my expectation of how market will turn out in the next week or so and hence need not be taken as gospel truth (I could be wrong too). We have 4th Feb as a Gann turn date by which time Nifty Future can achieve the level of 5920 (or at best 6000), before seeking new lower levels. Moreover, 200 DMA which was 5616 when we made bottom at 5629 is now at 5627 yesterday and is rising . Having provided support once, the next time this level may be easier to break.
Put Call Ratio of Index Options increased to 1.00 as against 0.86 on the previous trading day.
As tomorrow is FNO settlement day and when market is at such a cross road - volatility is obvious. Hence, irrespective of your own belief/view, please do not trade with out STOP LOSS.
With Best Wishes,
Ketan Asher.
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