Nifty update for 03-May-2012

Nifty futures touched 5300 levels once again the extended short covering rally was sold off at higher levels. If we look at the structure of many stocks like ICICI bank and SBI we could see a reversal from the important resistance zones.Thus it is still a wait and watch game and as said in the previous post if you are a nifty trader exit all long positions at the upper band of 5300+ levels. Bank nifty is still struggling to find its upside momentum and the positive move in copper cannot be utilized by the metal stocks. Dollar /Inr may be targeting new highs and that would be worry for the equity market to move up. The premium in nifty futures has come down with a rise a the volatility index showing sell on rise and some short positions are accumulated during today's trade.The Indian government and RBI got it wrong every time when ever they took some decisions about rate cut and controlling the currency manipulation. RBI declared a rate cut a week ago and crude oil has registered a new high and it is still surprising to see how they are getting it wrong every time. The policy paralysis is affecting the market every time when it tries to rally. For a nifty trader 5300 + levels are still a major resistance point and if you are short in the market levels close to 5330 would be the stop. Though some bullish voices can be heard here and there i could not see any long accumulation happening in major large cap stocks.In these kind of tight range bound markets ,considered to be an options writers paradise it would difficult for futures traders to sustain. Thus concentrate on stocks which are offering you good trading opportunities.Lets keep a range of 5190 - 5330.

As per the requests from some readers i am starting a new session for stocks only from a trading perspective . (The views expressed here are personal and make your own judgement while taking the trades. Don't wait for targets to be achieved as the risk/ reward capability of every trader is different.I personally don't encourage trading in futures though the rates mentioned here are of futures contracts.)

1. TATA motors - The stock has completed an up move and a secondary rally too. Any downward move below previous day's low could lead the stock to 295 zone. Though it wont be a short trade for risk averse traders it is considered as an exit signal from the long positions.


2. JET airways - The stock is still in a range bound mode but a break below the previous low could take the stock to 295 levels where the next Fibonacci number is placed. The volume data is showing a distribution pattern and does not look good on the long side.

3. BPCL - It took some time to form a top and thus it qualifies for a candidate with a good potential on the downside. The stock is considered to be very volatile and a break below 650 levels (eq price level) could take the stock to 590-600 levels. 

Take your own time to analyse these stocks and trade the stocks only if you are satisfied with your own analysis.