In my earlier note I have mentioned that 5200 will notbe broken in hurry during August, 2011 and I was proved to be completely wrong, owing to global crisis in Europe and USA, equities as a class of investment became totally orphan.... The ease with 5200 is taken out followed by 5000 in the complete sell off in response to the global turmoil, has shifted the range too, below 5200 levels. Nifty moved in the range of 5200 and 5800 during entire 2011, both the indian indices making new yearly lows and 52 weeks lows everyday for the past 10 days, brought the values of index heavy weights like RIL to very attractive levels. With Nifty touching 4796 on last friday, and bouncing back to 4850 levels, gives rise to two scenarios.
1. Nifty having completed 38.2% retracement of entire up move, can consolidate between 4800 and 5200 for some time,before the next break down or break up shall happen.
alternatively,
2. Nifty might continue the down ward journey and test 50% retracement levels around 4200 in this leg itself, with minor bounce due to derivatives expiry and because of oversold position in all counters including Nifty.
My personal view, is that nifty shall hold 4800 level for some time, as the time wise correction came much faster than anticipated, due to external factors, and astrologically, Planet Mercury who went into retrogression from August 3rd, 2011 will become direct from tomorrow...August 23rd, 2011, which will change the direction of existing trend, as observed on number of occasions, in the last decade, by me and eminent astrologers. As we go into expiry of August Settlement this week, I hope that some relief rally shall happen from here on, and the advance tax numbers as on September, 15th followed by RBI's monetary policy announcements and action based on inflation data in the coming two weeks, will influence indian markets, as I feel that RBI might pause to raise rates for some time, as the Crude Oil has cooled off, which helps the Indian OMCs and Fiscal situation too.
Strategy for the Day: Aggressive traders can buy 4800 Straddle of September for good returns, as IVs are high, with CBOE and VIX indices shooting up. One need to have strict stop loss owing to one's risk taking ability. Will suggest Trading Strategies for this settlement separately after seeing the price action today.
Happy Trading and Investing!
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