"November month is witnessing volatility and global sell off, due to huge write downs by financial companies of US, due to subprime losses, and resultant signs of economic slowdown, now looming large. Our markets started correcting from 05.11.2007 onwards were making lower tops and lower bottoms on daily basis, breaching 5DSMA & 20DSMA in the process, by yesterday. Though there are bouts of buying at key support levels, by DIIs and HNIs, the unabated selling by FIIs who have to reduce the postitions created under ODI, are putting pressure on our indices. Yesterday Nifty opened weak and buying support at lower levels around 5500 and short covering in the last one hour turned Nifty futures into premium of 25 points at the close.The traded volumes are low on rallies while they are high when markets correct, is an indication of short term bearishness.
US markets opened positive and traded firm but, selling in the late hours brought both Dowjones and Nasdaq below/near 200DSMA overnight. Nickie is already in bearish trend, thus, the global cues do not support any relief rally in the near future, in the absence of any cues for our markets. Investors are advised to sell into rallies and stay in cash, for picking up the quality stocks at lower levels, in the days to come. Nifty might test 50DSMA currently placed at 5188.76, in case it breaks 5410.76, which is 10% retracement level during this week.
Strategy for the Day: Buy 5400 calls on weakness and 5800 puts on rallies for quick returns.
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