NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE:
Yesterday's session we had one more up day (7th in a row) that too without participation from Reliance. Day's high at 5818 is at 0.618 level of the previous swing as shown on the EOD chart. After an intra day correction to make the day's low of 5771, Nifty Future closed at 5799. One more day when we have a small upper shadow on the EOD candle - suggesting selling at higher levels.
Tomorrow is an important day in view of FNO settlement and last day for the F.Y. 2010-11, an important for NAV calculation by Mutual Funds. Considering the close near the high of the day, we may see a firm opening to take Nifty Future to one more strong resistance level of 5865. This level is a trend line from two different positions (as shown on the EOD chart) and hence unlikely to be crossed in the first attempt. Moreover, this may be good level for a starting of a sharp correction, much awaited by me to fill the gaps near 5500 levels. Please watch 1050 level for Reliance as crossing of this level can bring additional strength to Nifty Future.
Short position may be considered only below 5760 with stop loss of 5800. On the down side, 5740 and 5700 will provide support. One can even consider going short at 5865 level with strict stop loss of 5905. Negative divergence continues on the 30 min chart, but the effect of it will be felt only when Nifty Future trades below 5760.
Please note that Dow is almost near the previous level of 12400 and much will depend whether it see a deeper correction after making a double top. To my understanding, the underlying factors haven't changed much - either here or abroad, over the last week (except of course a great win by India yesterday over Pakistan) for markets to rise for 7 days in a row.
Put Call Ratio of Index Options remained almost unchanged at 1.11 as against 1.10 yesterday.
Please do not trade without STOP LOSS.
With Best Wishes,
Ketan Asher.
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