TURNING POINTS FOR 16.02.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD

NIFTY FUTURE :

In the opening session, Nifty Future went down to make the day's low of 5397 and after 11 a.m. made a sharp turn around on the back of rise in Bank stocks. Thereafter, Nifty Future maintained upward bias and made the day's high of 5504 and closed the day at 5476. On the EOD chart you will find a trend line (in red) which may provide resistance.

For tomorrow, I would continue to suggest that fresh long positions should be avoided at higher levels. As mentioned yesterday, 5485-5500 will act as resistance. In the event it manages to cross the trend line referred above at 5510, it will have major resistance at 5555-5570 region.

As can be seen on the 30 min chart, Nifty Future is very close to the trend (in blue). Once this trend line is broken below 5460, one can consider going short below 5450 with stop loss of 5480. On the down side, it will find support at 5400 - 5370 and eventually 5325 to fill the gap left during yesterday's opening session. One can even consider buying 5300 puts which was available at Rs. 19 at the close. In the event, Nifty Future is not able to break 5510, probability of Nifty Future going for deeper correction will increase. As such, Nifty Future trading at 5 points discount to the spot, does indicate that market is factoring the above possibility.

As regards, Bank Nifty Future, it made a high of 11010 and retraced to close the day at 10936. It will now get strength only when it crosses the 11000 level where it goes above the channel on the EOD chart. Weakness will accelerate below 10700.

Put Call Ratio of Index Options increased to 0.99 as against 0.91 yesterday.

While above refers to Nifty/Bank Nifty Future, please do not forget to use suitable STOP LOSS for individual stocks too.

With Best Wishes,

Ketan Asher.