It was quite volatile but as expected Nifty ended flat in a range bound market. It is actually good for the market to spend some time in a range bound market as the positions could get squared off and thus reducing the premium. I would not like to trade these range bound sessions till we get a clarity regarding the move. Till we get into a trending phase it is better to hold on to writing out of the money options a delta neutral position. It would be a fresh move on the upside above today’s high of 5515- 5520 range and it could take nifty futures to 5625 region once more. We need some confirmation regarding the upmove from our leading stocks; they are Jindal steel and ICICI bank. Nifty futures did not show any increase in the volume and as I said the short positions are lying between 5500-5550 zone and today’s move proves that point. If these short positions were lying from 5450-5500 zones it would have lead to a much greater short covering rally on the upside but it did not happen, thus I would go for a fresh long position only above 5515-5520 zones. Both of our leading stocks were on the negative territory and we could get the leading indication there itself. SBI would give another leading indication as lots of short positions are lying in 2300-2325 zone and we have discussed in the previous posts. It made a high above 2300 but failed to sustain above these levels indicating lot of options writing happening. Thus we need to get a short covering rally in all the mentioned stocks and nifty for any upmove. Two socks that witnessed short covering would be stocks like TATA steel and Wipro and it is yet to see it would lead to some fresh buying. On the downside one could closely watch 5330- 5400 zone and we should see whether some fresh buying is happening in the stocks. Let’s keep the range of 5400-5520 and on the upside it considered to be a break out trade towards 5625. Watch the mentioned stocks too for a better trading opportunity as these shares are 98-99% proportionate to Nifty’s move.
thanks Vinu, I must admit that i daily wait for your blog to be updated on daily basis as it has added lots of value to my trading sense and prepares me for next day trade. Keep up the awesome jobe buddy.
ReplyDeletethanks
Nitin
(newbie)
Thanx a lot for your kind words ...if you have any suggestions for the improvement of the blog do let me know
ReplyDeleteIt would be great if you could also add nifty put/call analysis based on NSE site EOD data, like what FII/DII net was for the day , how much open intrest added/decreased on nifty future/relation to the premium...and your analysis on that.
DeleteI usually update my blog before the release of institutional data and i personally don't believe Put/call ratio would lead to a trade.The objective would be to get into longer trades than from an intra day perspective. Your suggestions were really valuable and would consider these for the betterment of the blog. Thanx a lot
DeleteVinu I have started reading your blog only couple of days back..M a beginner and trying to do my first trade on Nifty. Shall I go for long Nifty futures at today levels of 5330 for 5500 target ?
ReplyDeleteRgds
Jaya
@Jaya...as a beginner the first suggestion would be never trade in futures as it is meant for bigger players. Trade only in options and that too near out of the money options till half of the expiry month.I would advice let nifty settle down in the range or break down if you are going for a buy trade.Will update about the buying levels through the blog. Hope it helps
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