NIFTY FUTURE 3O MIN / NIFTY FUTURE EOD
NIFTY FUTURE:
After a subdued opening session, Nifty Future went down to make the day's low of 5470 and bounced back to make the day's high of 5334 and closed the day at 5316. The good part of the day's candle is that there is lower shadow - suggesting bullishness. Where as, lower top / lower bottom suggests weakness. On the attached chart you will find that the day's candle remains above the Trend Line (in Red) and has taken support on the median line of the Andrew's Pitchfork (in magenta).
For tomorrow, the EOD does suggests a firm opening, but considering that the Thursday is a market holiday, the enthusiasm on the part of the traders may be lacking as no one would like to take risks in these volatile and uncertain times. On the higher side, 5350 and 5400 remain hurdles. In view of the holdiays, I do not see much merit in taking fresh long position.
One can take short positon below 5300 with a stop loss of 5350. On the down side, 5250 and 5190 will provide support. However, on the break of 5250 Nifty Future will break the trend line and weakness may accelerate.
As regards the Index Options data, on the Call side, there is an increase in open interest of about 20 Lacs in the strike price ranging from 5300-5500 where as on the put side there has been significant increase in open interest of about 10 Lacs in the stike price of 4800. As this strike price is about 10% from the current market price, I wonder the wisdom of the buyer in paying the premium of Rs. 6/-. For us, the wisdom lies in not worrying about the whys but just following it by buying the put for the strike price of 5000 which is available for Rs. 19/-. As the time to expiry is short, the quantiity can be kept small so that the total risk money is affordable.
Please do not trade without STOP LOSS.
With Best Wishes,
Ketan Asher.
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