Wednesday, March 2, 2011

TURNING POINTS FOR 03.03.2011


NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE :
TOO GOOD ! TOO FAST ! WILL IT LAST?
This I guess, sums up the market performance on Monday. After a firm opening, Nifty Future maintained a steady up move throughout the day. Interestingly, the day's high was 5555 - a level I have referred to many times in the past as a key resistance level. After adjusting the last 30 min Avg. the day closed at 5544. While I was positive on the market, I definitely did not expect Nifty Future to rise by 206 points in a day, that too after a giving up all the gains just the previous day. But this volatility is what brings all of us to this market - for better or for worse!
Nifty Future has closed strong and also above the trend line (in blue) which has provided resistance on earlier occasions. This fast move has brought us right into the resistance area starting with 5555 and going up to 5700. While there are resistances every 50 points, I would consider 5640 to be a strong hurdle as it is the channel line on the monthly chart. I doubt this could be cleared - at least in the first attempt. Moreover, US/World markets too traded weak yesterday and the possibility of petrol price hike could dampen the sentiments at higher levels.
For tomorrow, it is best to avoid fresh long positions as 5570 is the next immediate resistance level and then followed by 5620 and 5657 (200 DMA). It would be better to go short at the first sign of weakness on 30 or 60 min chart with one of the above levels as stop loss. As the up move has been sharp, Nifty Future could end up going sideways, before it gathers weakness. The first level to indicate weakness will be when Nifty Future trades below 5500. On the down side 5465 and 5420 will provide support.
Put Call Ratio of Index Options increased to 1.08 as against 0.99 on the previous trading day.
Please do not trade without STOP LOSS. Even if market trades strong tomorrow , I would not believe that the worst is over for our market. Hence booking profit at higher levels would continue to be a prudent way to trade.
With Best Wishes,
Ketan Asher.

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