NIFTY FUTURE WEEKLY
Last week saw 7th week of sustained up move, with only a small upper shadow on the weekly candle. In all, we have seen rise of about 1100 points (24%) in just 7 weeks that too with no correction so far. The last week saw a range of 331 points (High 5700 & Low 5369) and closed at 5590.
While there is nothing to suggest that we will/should have correction if the FII money keeps coming in the way it has done since 20th Dec. However, I do believe the trend line (in blue) on the attached chart should provide a strong resistance. The only indication available today is the very slow pace of shifting to Mar Series of Nifty Future. This does suggest that enthusiasm is vaning at higher level.
If you believe that all markets correct sooner or later, it would be better to wait for a correction to create fresh long positions. Considering that Friday's High price of 5700 is a freak trade and close is at 5590, short position may be considered at higher levels with stop loss of 5675. In the best case scenario, Nifty Future can go up to 5725 (trend line resistance), though it looks unlikely, at least before FNO settlement. On the down side, once Nifty Future trades below 5530, it can go down to 5450.
With Best Wishes,
Ketan Asher.
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