NIFTY FUTURE WEEKLY
The past week saw Nifty Future closing near the high of the week at 4876 giving hopes that "All is Well". During the week, Nifty Future managed a high of 4918 and low of 4705 (total range 213 points).
While the weekly close no doubt looks good - that too after Infosys lost over 8%, we must factor in that 4925 level has provided Strong resistance as of last week. With the commencement of negative news flow in the form of S&P downgrading France, it may be difficult for our markets too, to continue with up side momentum.
Nifty Future moving down below 4800 should be considered as the 1st indication that down move has begun. I would not advise any long position for the next week. Instead - as a contrarian trade, one can consider buying 4700/4800 puts available at Rs. 22/46 depending on your risk profile. Buy only that much quantity which you can hold till the end of the FNO .
Those readers who are going through the Option chain data provided by NSE, will find that in many stocks there has been considerable increase in open interest on the put side. However, as there are only 8 trading sessions left before FNO settlement, please take only small quantity as time value continues to be against the buyer of the option.
On the attached weekly chart you will find that 4289 (say 4300) level should provide good support to Nifty Future in the weeks to come - when Nifty Future breaks the previous low of 4538.
Please do not forget to protect your long positions at the first sign of weakness.
Wishing you all a Happy Makar Sankranti!
Ketan Asher.
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