Nifty continues to hold the 5600 levels and it is expected to face stiff resistance close to 5650-5660 zone. It had been quite a good week for options writers as they could get around 70-80 points if we combine 5600 call and put.On the upside there was lot of call writing has happened in 5600 call close to 65-70 rate and this would be a crucial level to watch for. In a nutshell even if nifty crosses the upside hurdle it could most probably a whipsaw if the rates of this call is failing to surpass the previous highs and the simple interpretation would be the smarter traders are writing the options at higher levels. In any upmove it is better to avoid nifty and concentrate on stocks if you are a nifty futures trader. The weakness in nifty is still evident and i expect nifty to form a five wave decline to 5300 by December and we could see the weakness in largecap names. Poor turnover data is arresting some the downward momentum and helping the market to be range bound ahead of November expiry and options traders would not be much happy to be a buyer in options in the expiry week. 5650-5660 levels are crucial as we have the near term resistance placed over there and the convergence of some important moving averages.
Among the stocks there could be a trading opportunity in 3 namely Wipro,Motherson Sumi and Auropharma. Wipro is all set to break above the highs to 400 levels and it needs some support from the nifty too which is not gettting as of now and December 400 call would be the cheapest investment for this. Motherson Sumi is at a new high and technically new highs have to be bought. Auropharma is in a sell mode and it is a short sell below the previous low
