12 January 2016


"SELL NIFTY BELOW 7550 TG 7520,7490 SL 7600 "
Start-long  positions at 7600. Start-short positions at 7520.
Big moves could go till 7700, 7445.
A long 7700 c (43), long 7500 p(96) could gain 10-15
start-long positions at 16100. Start-short positions at 15800. Big moves could go till 16100,15500. Downtrend may continue.
The Nifty ended with yet another bold red candlestick as after opening mildly in the green; the index entered an intraday downtrend and also closed the day just below the important support level of 7500. The Sensex pared some losses after falling over 300 points in the early trade on Monday and closed 109 points down at 24825 following weak global cues. Nifty settled 37 points down at 7563. Sentiments remained dampened since morning as markets made a gap-down start as investors remained on sidelines ahead of Q3 earning season which is due to start tomorrow with TCS and IndusInd Bank unveiling the numbers. Traders also remained concerned with a private report stating that consumer sentiments in India fell for the fourth consecutive month in December to the lowest on record, as consumers reported a further deterioration in their personal finances amid rising inflation.
While a close below 7540 is a negative outcome by itself, a sustained move below 7500 can confirm a further breakdown in the index and can open downsides towards 7300 in quick time. The action in options suggests 7300 as the next important support in case 7500 is breached as the two strikes are having the highest Open interest at close to six million. For the short term trend to reverse from here, a breach of 7620 will be the essential and as long as below the level, any pullback attempt is likely to be met with strong resistance. Today’s close for the Nifty is a fresh 52 week low close which thus makes short term trend extremely cautious.
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Supports: 7,600 and 7,580
Resistances: 7,630 and 7,650

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