Both indices traded with volatility, as they are confined to a range, and finally closed marginally in negative territory. While investors are reluctant to add long positions a head of UPA government's trust vote on 22nd, head line supply at 4110 to 4120 range coupled with negative news on Ranbaxy invited selling pressure, however, 4000 level on Nifty was held during the day. 4 to 5 % which used to be a monthly gain on indices few years back, has become the weekly and some times daily phenomenon, on the Nifty either up or down, since the beginning of the year(2008) is keeping the retail investors to stay away from the market, which is resulting in lower volumes too. In my view, Nifty shall hold 3850 to 3900 support till the decision on the UPA government survival is known; and a clear direction either a steep fall or a blow out rally shall happen from there on. It is certainly a market for professional traders, who know the technical levels to take a view and exit quickly with strict stop losses on the trades, to minimise losses and make intra day earnings. VIX closed at 31.51 yesterday, but the day's high being 55.71 suggests return of volatility. Nifty futures closed at 12 points discount that an indecisive view, as most of the positions created intraday are squared off before the end of the trading. In these uncertain times, carrying overnight positions costs severely.
US markets closed with losses yesterday, and asian markets are trading in negative territory presently. Singapore Nifty futures are currently quoting at 79 points discount suggests weak opening for our markets. Crude touched US$147 and might top out around 150 levels, as it is in over bought territory, as per commodity experts. If crude corrects to a level of 100 to 120 levels on profit booking or any other positive trigger from US, then there will be a good rally globally. Indian crude basket has crossed 140$ is certainly a bad news for oil marketing companies, indian economy and corporates. The demand for introducing 'windfall gains tax' private oil refineries from Samajwadi Party, whose support for survival of UPA government is crucial and vital, is sending shivers among the stock prices of Reliance and Reliance Petroleum which are index heavy weights, to be watched carefully. Ofcourse, government cannot take any decision on these type of matters right now a head of 'trust vote'. Thus, the outcome of the trust vote, and the importance of each component of UPA government from 23rd onwards, shall influence stocks, sectors and indices.
Range for the day: Nifty might trade in the range of 3950 to 4150.
Strategy for the day: In case of weak opening of nifty futures today, go long on Nifty futures with a stoploss of 25 points from the purchase price for intra day trading.
2 comments:
buying straddle instead of strangle and futures should be in spread position in this kind of market as loss is increasing day by day---
Yes it is a good strategy.
bkvrkrao
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