NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE :
It seems the market celebrated Diwali a day after Muhurat Trading by opening gap up and thereby leaving the previous gap unfilled. On Friday, Nifty Future made the day's high of 5403 - very close to the 200 DMA of 5418. This euphoria was more out of Technical reasons of short covering rather than the resolving of Euro crisis. As such, a small news item in todays paper regarding possible legal hurdles likely for Germany may puncture the feed good factor and hence it will be important to see how Asian markets opens tomorrow.
On the EOD chart, I have drawn a trend line which will act as resustance alongwith 200 DMA. Normally 200 DMA provides support and resistance at least once, if not more. In light of the above, I expect the gap to be filled before we even attempt to cross 5450. Fresh short position may be taken with this level (5450) as a stop loss. As long as Nifty Future does not go below 5185, we have to consider the fresh up move intact. However, this being too far, it will be better to book profits and buy at lower levels. In view of the strong resistance shown on the EOD chart, it will be better to wait for buying on corrections. Left out feeling should be avoided as there are many hurdles around 5500 region as discussed in Weekly/Monthly post.
As regards the Index Option data, there is an increase of 46.25 Lacs open interest in puts for the stike price ranging from 5200-5400. Where as on the Call side, there has been increase of 30. 74 Lacs in the strike price ranging from 5400-5600. Considering that the increase is more on the put side, I would expect Nifty Future to correct before it continues the up move!
I would consider it worth while to buy small quantilty of 5000 put at about Rs. 20-25 more as a Contrarian buy. After all, tomorrow is the last trading day of the 64th month as shown on the monthly chart.
Please do not trade without STOP LOSS.
With Best Wishes,
Ketan Asher.
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