NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE :
In today's trading, Nifty Future opened with a downside gap, that remained unfilled during the day. For the gap down opening it remianed a fairly small range day - just 46 points and thus a difficult day for the day trader. The support at the Andrew's Pitchfork median line, is well depicted on both - 30 min as well as the EOD chart. At the time of writing this post, US and Europe are trading nearly 2% down and we too can expect a weak opening.
Considering today's support on the median line, I would suggest going short below 5000 with stop loss of 5055. On the down side, it will find support at 4920 and 4884. In the event of Nifty Future taking support at this level, I would suggest squaring up of the puts as they are loosing time value very fast, with just 7 days left to FNO settlement.
Another important thing I would like to highlight is the FNO data which indicates that Put Call Ratio of Index Options increase to 1.20 (prev day 1.09). Though the total built up in put options has outnumbered the calls, we must not ignore the fact there has been significant increase in the open interest of Calls upto 5300. Just ask yourself - why would someone buy Call ranging from Rs. 100 for 5000 Calls to Rs. 10 for 5300 Call if Nifty Future is going to test 4700 levels during this month? If you recall, we still have unfilled gap to be taken care of in the 5300 range. And more importantly, the monthly chart indicates that Oct 2011 could be the critical month which could see a panic low.
I hope the explanation given above, helps you to take the right call on the market tomorrow. In any case do not remain short, when Nifty Future trades above 5055.
Whatever may be your view, please do not trade without STOP LOSS.
With Best Wishes,
Ketan Asher.
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