April series expiry and settlement are smooth, albiet small volatility, due to information from external sources, such as government's proposed action to bring cement and steel under ESMA purview, disappointing results from ACC, in line results from HDFC etc., In finality, the settlement price is higher than March series(4830.25), by 169.60 points a raise of 3.51%, with satisfactory roll over to may series, is good news, that markets have finally stabilized around 5000 level which is crucial for sustaining the upmove. May series open interest position also being higher than the beginning open interest at the commencement of April series, gives indication of increased participation, though the pessimism and fear continue to daunt the bruised investors, during January to March steep fall and hightened volatility.
Markets are digesting the negative news slowly, and looking for positive cues on inflation (data to be released at 12 noon today); regulatory action from Government and RBI and FOMC decision on interest rates etc., by next week, and most of the results would have come by then too. This enables the fund managers to churn their portfolios, and readjust to look for winners in the uncertain times, which year 2008 is witnessing. US markets have closed firm and asian markets are trading with gains. Singapore Nifty futures are trading with 30 points premium at the moment, as new series begin today, we expect that Nifty will open positively at the opening and should trade above 5050 initially, and depending on the inflation numbers might attempt to clear 5086 resistance and move above 5100 today
Nifty might move in the range of 4350 to 5350 during the month. Thus, it is recommended to adopt the following strategies for May series:
Strategy-1: Buy May Nifty futures above 5020 with a stop loss at 4970 duly hedging with 5000 put option vailable at Rs.175/- currently. This strategy requires an investment of Rs.50,000/- initially.
Strategy-2: Buy May 4900 Call Option at Rs.235/- and Sell 5200 Call Option at Rs.77/- which are available currently. This strategy requires an investment of Rs.35,000/- initially.
Range for the Day: Nifty might move in the range of 4920 to 5120 today.
Friday, April 25, 2008
Nifty Stabilises around 5000 level - break out on upside is in offing!
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2 comments:
your strategy works only if market doesn't get below 4900 and that is very much likely.
which strategy 1 or 2 u r referring?
what is ur view whether market would go below 4900 by 29.05.2008(expiry date)?
bkvrkrao
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