50DSMA placed at 4907.31(Nifty) and 16367.27(Sensex) should offer support on any weakenss today at the opening or intra day, which is the last hope for bulls today. Breaching these levels on closing basis today and there on, will push the indices into deeper down trend, as it would result in the breaking of trading range for May'2008.
Over weekend, karnataka state assembly election results are announced, where BJP emerged as single largest party, short of 3 seats to reach simple majority. Though congress party improved its tally, over previous poll, seems to have been punihsed, mostly by urban voters, due to raising prices(inflation). Thus, UPA government shall concentrate on inflation management further more seriously, as another round of assembly polls are scheduled for November/December'2008, and then General Elections before March/May'2009.
Nikkie opened in negative territory, owing to US weakness on friday, Crude has reached US $ 135.09 on 22.05.2008, and cooled a bit, but quoting above 131 mark currently. Singapore Nifty futures are currently quoting at a discount of 22 points, suggest negative / weak opening for our markets, since this is settlement week, roll overs shall pick up, where two way volatility can be high.
Strategy for the Day: Sell Strangle on Nifty 4900 call and 4950 put to capture the high IV and quick returns if you are nimble day trader. This strategy gives a range of 4790 - 5060; within which it is profitable. Beyond these levels, the loss can be unlimited. However, one can go long on Nifty futures above 5000 and short on Nifty futures below 4900, owing to risk perception, to guard against such unlimited loss.
1 comment:
Thank you
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