NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE :
After a firm opening, Friday's trading remained volatile within 84 points range (High 5155 & Low 5071) - that too on a day when RBI announced 25 bps rate hike and a day earlier Govt. increased the petrol prices by Rs. 3.15 per litre. While there has been a small upper shadow on the EOD candle, but as the higher top /higher bottom is maintained, there is no indication that the bullish momentum is receding.
Once Friday's low is taken out, we can consider the Friday's high of 5155 as just short of double top by 20 points. In that event we may see a sharper fall when Nifty Future trades below 5040 & 5000. The problem as I see it is the level of 5200 (relaxable to 5220) which may not be crossed very easily. Though World markets have been rallying for the past one week, I am sure our very own problems of Inflation and high cost of borrowing will sink in - sooner than later. Even the Options data is skewed in favour of bearish bias with higher increase in open interest of Put Options. The put call ratio of the Index Options decreased marginally to 1.09 (previous day 1.13).
All in all, I would advise caution at higher level and better not to go long. One can consider going short when Nifty Future trades below 5040 with stop loss of 5090. The fall will accelerate when Nifty Future trades below 5000. On the down side, it will find support at 4950. In any case next week will be a make or break week for option traders on both sides of the fence, as time to settlement is running out fast. If you share my downward bias, selling 5200 call (with stop loss till Nifty Future crosses 5220) may turn out to be a profitable option.
Please do not trade without STOP LOSS - more particularly when Nifty Future trades below 4950.
With Best Wishes,
Ketan Asher.
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