NIFTY FUTURE 30 MIN / NIFTY FUTURE EOD
NIFTY FUTURE:
As the world markets were flat to positive yesterday, Nifty Future too opened strong and maintained the up move through the day. May be market realised that yesterday's fall was little over done. Today's close at 5442 is near the top (5459) of the day - suggesting strength. Should be we consider yesterday's sharp fall just as an abberation and expect the market to rally from here? I don't think so, particularly because of the ease with which it broke the support yesterday at 5400 level. Moreover, there are many more hurdles on the way up - particularly at 5480 (shown on 30 min chart) and 5530 (0.618 level). I doubt if this resistance will get cleared in a hurry.
For tomorrow, one can consider going short below 5420 with stop loss of 5470. Altertantively, one can consider going short at higher levels around 5480 with stop loss of 5520. Considering that US and European markets are flat at the time of writing this post, there is a possibility that Nifty Future may open strong and test higher levels at 5480.
I do not advise going long at higher levels.
As regards the Index option chain data, I find that there has been considerable addition in open interest on the put side. Interestingly, there has been reduction in open interest in respect of Bank Nifty Future - suggesting liqidation of long position at higher levels.
I would consider tomorrow to be an important day for the near term trend of the market, as I believe that in case Nifty Future moves below 5300 levels, it will break the trend line on the EOD chart and that will entail deeper correction for the next few days.
Whatever may be your view, please do not trade without STOP LOSS.
With Best Wishes,
Ketan Asher.
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