TURNING POINTS FOR 10.08.2011

NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE:
As expected, Nifty Future opened with downside Gap and made the day's low of 4951 and never to come back again. Nifty Future sharply moved up to make the day's high of 5173 but came down sharply after European markets opened weak. A volatile day that finally closed at 5083.
For tomorrow, we can see the up move continuing which should be considered merely as a bounce and may be the worst is not yet over. Long positions may be taken with stop loss of 5075. On the higher side we have resistance at 5120 and 5165. Once this level is crossed we may see good momentum which could take the Nifty Future to 5250 and eventually to 5330 to fill the gap as shown on the EOD chart (must see).
As mentioned earlier, this up move should be considered only as a "dead cat bounce" after a fall of about 10% in 9 days. Moreover, there has been considerable addition (over 58 Lakhs) in the 4300 to 4500 Puts which should not be ignored. In the event Nifty Future goes up as indicated above, it would make a good contrarian trade to buy 4700 Puts which should be available at about 25, once Nifty Future trades above 5200. I am sure those who had the wisdom of buying 5000 puts must have gained substantially and they will do well to buy as stated above for a small portion of their profit. Who knows, with GOD willing, they may be in for a second bounty for the month. Please do not get carried away by the up move and stay light with long positions particularly with futures. Please remember that US down rating is not an event that can be wished away in a day or two, and if the AAA rating has such a significance than the implications should be far reaching in terms of time as well as the consequences.
Put Call ratio of Index Options increased to 1.24 as against 1.16 yesterday.
Please (read it twice) do not trade without STOP LOSS.
With Best Wishes,
Ketan Asher.
PS : Those readers who are interested in tracking FNO data during market hours, should visit www.nseinda.com and select Live markets and Equity Derivatives. I find the information quite interesting and to top it all - its free!