Wednesday, November 30, 2011

TURNING POINTS FOR 01.12.2011


NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE:

After a weak opening Nifty Future made the day's low of 4756 and made a sharp up move to make a high of 4862. Thereafter in a volatile move, Nifty Future went down sharply and took support on the trend line as shown on 30 min chart, only to bounce back and close the day at 4832.

With US markets rocking at over 3%, it is natural to expect a strong opening tomorrow. As usual, I do not advise buying at gap open. If the momentum is maintained, we can expect Nifty Future to go up to 4930. I would recommend a contrarian strategy to buy 4700 puts, when Nifty Future trades at higher levels. Moreover, it would be better to sell on delivery basis as Nifty Future can still come down as many stocks remain weak. It would definitely not be prudent to go long at higher levels.

As regards Index Option data, there has been increase in open interest of 18.15 Lacs for the 4700 puts. As compared to this, there has been no significant increase on the call side. This bias towards puts, indicates to me that all is not well and there is every possibility that Nifty Future can come down any time after facing resistance at 4930.

Please do not get carried away by the rise in US markets and in any case do not forget to use STOP LOSS.

With Best Wishes,

Ketan Asher.

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