ndian Stock Markets, after a stable gap down opening, slide steeply in the latter half of the day and end the day with losses of more than 3%. Provisional data for today indicates strong selling from FIIs @ 1300 Crores. Among the losers, high beta stocks in Nifty like ICICI bank, Sterlite Industries and Tata Motors have slid more than 7%. JP Associates hit its 52-week low of 120 Rs.
The current level augment that markets are now entering the panic phase now. Till the time, Nifty remained above 5000 levels, there seemed a hope that markets will gradually recover and some buying was seen around 5000-5100 levels. But once these levels have been breached, the only way markets finding themselves going is "DOWN".
Amidst such scenario, whats should a trader do now? If we think rationally, Nifty should find some strong support @ 4800-4850 levels. Till the time, markets remain above 4775, there are strong chances that markets can recover till 4950. Hence, traders can now go long on Nifty tomorrow (if markets have gap-down opening) at around 4850 with Stop-loss of 4775 and target of 4950.
Options traders can play on reverse-straddle tomorrow selling both 4800 Call and Put. This should fetch around Rs. 200. One may keep a stop-loss @ 4600 on downside and 5000 on the upper side.
Amongst the stocks, Maruti @ 1200-1210 levels. The stock is currently at its absolute base of last 9 months and should act as a strong support level. One may keep a stop-loss of 1140 and target price of 1350 on the stock. Fundamentally also, the stock has come to the decent levels.
Anyways, time is surely test the nerves of several traders and chances are ominous that short-sellers may find themselves stuck in no-win situation. So temptation to go short should be resisted as market enters its strong support zone of 4800-4850.
The current level augment that markets are now entering the panic phase now. Till the time, Nifty remained above 5000 levels, there seemed a hope that markets will gradually recover and some buying was seen around 5000-5100 levels. But once these levels have been breached, the only way markets finding themselves going is "DOWN".
Amidst such scenario, whats should a trader do now? If we think rationally, Nifty should find some strong support @ 4800-4850 levels. Till the time, markets remain above 4775, there are strong chances that markets can recover till 4950. Hence, traders can now go long on Nifty tomorrow (if markets have gap-down opening) at around 4850 with Stop-loss of 4775 and target of 4950.
Options traders can play on reverse-straddle tomorrow selling both 4800 Call and Put. This should fetch around Rs. 200. One may keep a stop-loss @ 4600 on downside and 5000 on the upper side.
Amongst the stocks, Maruti @ 1200-1210 levels. The stock is currently at its absolute base of last 9 months and should act as a strong support level. One may keep a stop-loss of 1140 and target price of 1350 on the stock. Fundamentally also, the stock has come to the decent levels.
Anyways, time is surely test the nerves of several traders and chances are ominous that short-sellers may find themselves stuck in no-win situation. So temptation to go short should be resisted as market enters its strong support zone of 4800-4850.
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