Asian cues aren’t that great, almost all the major indices are trading in deep red. Japan’s Nikkie and Hang Seng are trading with 2.5% cut, Shanghai composite is down 2%. US Markets ended in red on Friday on the back of worsening situation in Euro zone Debt crisis .
Market uncertainty is ruling high and breach of support level could see violent swings on the downside, Nifty will open close to 5000 today and 4990 will be the support tested if this gets broken then last hope for bulls is to save 4970 below which there will be bloodbath in the markets. Nifty is expected to trade in the red for most of the time and close below 4990 will further increase the weakness.
Our trade recommendation are on a roll as call given on 13 May is in deep profits now and i feel it might be prudent to convert that profit in cash.
Trading Strategy : Square off the nifty Futures Shirt position taken on 13 may at the level of 5010. I would like to see how will Nifty react at its 100EMA before taking any fresh position.
Once below 4970 we might be headed for 4830 that will be the level where cash based buying is recommended on Fundamentally strong counters like Reliance Industries, Axis Bank, IFCI, Bharti Airtel and UNITECH.
Yesterday Nifty closed above an important level of 5130, It looks like we gaining some strength on our way up, Nifty will now attempt to go higher.
Asia is giving good signals this morning as Nikkei225 is trading with gains of 1.75%, Hang Seng and Shanghai Composite are up with green tick of 0.5% to 1%.
Singapore Nifty suggest we will open the trade in the green at around 5180, Nifty will have a good support coming in at 5140 and above the levels of 5210, bout of short covering rally may take place.
5310 on the Nifty will be the next hurdle, although technical are not suggesting a screaming buy on the Nifty Futures so we will wait for a clearer picture.
Trading Strategy: My yesterdays recommendation was not traded as 5180 never came during the trading session, yesterdays High was 5176.
My trading recommendation will be to
Short Nifty Futures at 5210 and buy same quantity of 5300 Call for hedging, targets for short position will be 5040 and 4960.
Global markets are tepid today. Japan’s Nikkei is 1/2% up, Hang Seng is down 1%, Shanghai Composite and Straits Times are also showing minor losses. US also ended mixed with weakness in Euro, So overall global mood is quite dismal.
Indian Market will also trade inline with global factors, Nifty will open near the supply zone of 5130-5150. It will face stiff resistance at these level, Right now it is at 5180, above that market trend remains upward , so positional trading direction should be upward only after we close above 5180 for at least two trading session.
Lets take a quick check on F&O data-
Nifty PCR at 1.13 versus 1.16
Nifty 4800 Put Adds 3.5 lakh shares in Open Interest.
Nifty 5100 Call Adds 3.9 lakh shares in Open Interest.
Nifty 5200 Call Adds 4.9 lakh shares in Open Interest.
F&O data suggest that market will trade in tight range, FII’s selling may push it downward in next few days.
Trading Strategy- It is advisable to open positional Short positions in the market at higher levels, Short Nifty Futures at 5180 and buy same quantity of 5300 Call for hedging, targets for short position will be 5040 and 4960.