It was a day for a much needed relief rally close to 4950 levels. As i was mentioning in the previous posts traders are getting enough time to close their short positions and any rally in nifty is happening due to buying happening at lower levels. On the way up nifty has to cross so many hurdles which are placed around 4980 and 5030 and it does not appear to be that easy. We could see some serious short covering happening in stocks especially in L&T and some major large cap stocks. Though there was a bounce back, banking stocks were not in support of that rally and that should be considered as a negative factor for nifty.If there is an extension of this short term bounce stocks like federal bank and Voltas are expected to move higher. On the short side if nifty makes an upside cap the negativity would be visible in stocks like Axis bank and IDFC. As a trader apart from nifty and the mentioned stocks i would not like to go for any other and it can be a choppy market.Anyway as per the charts and derivatives data 4800 would act as a decent support on the downside and any fall close to 4800 should be taken as an opportunity to cover any short positions.Volatility data shows some short covering happening close to 4880 levels and never try to go short when nifty is trading at a discount of 5-10 points.
Hi Vinu... Totally agree with your post today... Can you elaborate a little more on LT? Is the short covering rally over you think or is there more upside there?? I bought a few May 1100 PE's today when LT touched 1230 odd levels... Do you see LT drifting down towards 1150 odd levels in the next few days??
ReplyDeletesir,do you think nifty can go as low as 4350
ReplyDelete@Deepak : The trade for L&T remains on the short side and my target for l&t would be around 1000, but as an options trader you should know about the time frame too, thus i would advice you to book profits today itself.
ReplyDelete@Vritika : I expect 4500 levels in June series, but as per wave counts it is 4300. Anyway lets wait and watch and no need to worry, i'll share my views through the blog