Yesterday's trading was a capitulation day, where our indices opened gap down, made new lows, where bargain hunting coupled with short covering lifted the indices to positive territory amidst very high volumes. The total volumes touched 98000 crores on the bourses, was one comforting feature. Well lots of news also is out now....viz., Fed left the rates unchanged, UPA-Left meeting bought time till first week of July, from the stand off on "Indo-Nuke" deal pursuation, thus our markets can concentrate now on fundamentals and technicals of stocks and indices. Today is the Settlement day for current series, and the roll overs are on short side only to next month series which have full 5 weeks, one of the longest settlement. Based on Nifty options roll over to next month series, it appears that the settlement price of Nifty today can be above 4100.
FIIs selling appears to be done with, and they also became margin since yesterday, if follow up buying emerges then yesterday's lows on inidces Nifty(4093.20) & Sensex(13731.54) would be confirmed as short term bottom; the confirmation of the same shall be known, how markets unfold today and tomorrow. Be watchful, as the volatility and volumes shall be higher in case of such event. VIX closed at 36.46 indicates higher volatility to continue. Crude closed to US $ 134 after falling to 132$ yesterday. It is consolidating betweeen 132 and 140 for quite some time now, break out of this range will give direction to global markets in the near term.
US markets closed in positive territory marginally, Singapore Nifty futures are currently quoting with 16 points premium, might give positive opening for our indices initially, but two way volatile movement can be expected and the last half an hour will decide the settlement price, where volatility can be highest. July futures have closed at steep discount of 47 points that strategy to sell on rallies shall continue for some more time, but HNIs, Funds. 5DSMA placed currently at Nifty(4312.39) and previous closing price of 4347.55 will be the initial resistances to be encountered by Nifty, for further gains.
Range for the Day: Nifty might trade in the range of 4150 to 4350
Strategy for the Day: Buy Straddle on Nifty strike price 4250 of current series for intraday trading and quick returns. (Buy 4250 Call Option & Put Option)
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