Tuesday, October 11, 2011

TURNING POINTS FOR 12.10.2011


NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE:


In today's trading, Nifty Future opened with a gap and made the day's high of 5055 in early trades. Thereafter, Nifty Future maintained downward bias for the rest of the day and made the day's low of 4970. It finally closed weak at 4982. It may be interesting to see the 30 min chart where I have showed the Resistance level with the help of Andrew's Pitchfork. Please note that the gap area is between 5062 and 5113 and today's high has shied away from entering the gap area.


Tomorrow should be an interesting day, with announcement of quarterly results from Infosys, where not only the results, even the guidance too will be watched keenly by the market players.Though today's close is weak, it has not left much guidance for what to expect tomorrow. It will be Infosys results that will set the tone.


I would suggest going short below 4970 with stop loss of 5010. On the down side, it will find support at 4920 and strong support around 4870. As such, I would suggest not to get too bearish until 4870 is broken. In the event 4870 is broken, we are back to testing the 4700 levels.


Today's option data makes an interesting reading as there has been considerable increase (52.13 Lacs) in open interest of Strike Price starting from 5000 to 5400. On the other side, open interest in Put options is not so aggressive with major increase in Strike Price of 4600 (7.08 Lacs) and 4800 (5.07) being noteworthy. This is in complete contrast to what we saw yesterday and this information must be factored into for tomorrow's trading. I would read it as markets going down after the reults and take support around 4870 and then continue the up move to fill the gaps at 5100 and even 5300 over the next few days?? Well this is just a conjecture that comes to mind and all depends on what Infosys has to announce tomorrow. So stay tuned but don't get too bearish as long as Nifty Future remains above 4870 level.


One can consider going long above 5020 with stop loss of 4970. On the higher side, it will face resistance at 5065 and 5165. It would be prudent not to remain short above 5065.


Whatever may be your view, please do not trade without STOP LOSS.


With Best Wishes,


Ketan Asher.

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