Nifty is still in a negative mode and on its way down to the immediate target zone of 6050. The major development that has happened in the previous week could be the breakdown in small cap and micap indices. These indices are in a pullback mode and we could expect a normal correction towards the 61.8% retracement as in any bull market rally. I am expecting the midcap index to correct towards 7350 zone in the near zone and thus we should shift our focus on the short side from bank nifty to midcap names. Bank nifty and YES bank have almost done with the mentioned targets and we 6400+ would be a little bit difficult for nifty before Jan expiry. Net OI on 6300 and 6400 calls are still on short side and on the put side bulls are still holding the positions in 6100 put. Feb 6200 calls and puts were gaining strength and we could see some range bound sessions in the coming days before nifty dropping to the mentioned target zone. Thus in a rising market if all the broader indices are closing in the red zone it is not a good sign for bulls. I am expecting a bull trap close to 6300 zone and thereby every dip was used as a buying opportunity till now and we could not see a decent retracement correction in the recent period. It is wise to assume a wait and watch approach for any buying opportunity. Bank nifty should cross 11200 zone for any meaning recovery in nifty and it is a little bit difficult for that to happen before expiry.
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