Tuesday, February 8, 2011

TURNING POINTS FOR 09.02.2011


NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE :
In today's trading, after opening at yesterday's close levels, Nifty Future made a top of 5421 and thereafter maintained a downward bias throughout the day. At the first instance it took support at 5333 and tried a bounce for couple of hours and in absence of any buying support, in the last one hour made a low of 5304. On the EOD chart, you will find that it has taken support on a trend line running from the lows made in June 2010. As regards the wedge, it has gone marginally below it. The disappointing day closed near the low of the day at 5314. Even in Bank Nifty Future the situation was no better, as it continued the second day of making a new low. The fact that SBI is showing strength, is much comforting, else Bank Nifty Future would have been still worse.
I had indicated that today is the 64th trading day that too on the 8th of the month and this coincidence should help us to make a low. While a new low has been made, whether it will remain so and whether we will see a bounce from here? I remain hopeful, as there are no new negative triggers for the market, it is just the nervousness and lack one big positive day to shake out the bears that is needed. Let us hope we have it tomorrow, as it will vindicate my view of new low on the 64th trading day.
For tomorrow, I would suggest going long once Nifty Future trades above 5355, with a stop loss of 5300. On the higher side, it will face resistance at 5375 - 5420 and 5465. Considering my positive bias, I would recommend buying small quantity of 5500-5600 as a contrarian buy - particularly as we are just getting ready for a major event for the capital markets. Even delivery based buying of frontline stocks will also help you ride the pullback on the way to Budget Day.
While I continue to advise against going short at lower levels, I would also caution that buying without strict stop loss (particularly futures) is injurious to ones financial health, as markets can continue to slide, without taking cognizance of my positive bias.
Put Call Ratio of Index Options decreased to 0.86 as against 0.98 yesterday.
Even at the cost of being repetitive, I would urge you not to trade with out STOP LOSS.
With Best Wishes,
Ketan Asher.

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