If Monday was full of enthusiasm on account of Reliance patch up, then Tuesday was just the opposite. Overnight weak closing in US markets triggered a gap down openings for Indian bourses. The weakness persisted throughout the day and accentuated during afternoon when Europe opened about 2-3% down. Finally, the benchmark Indices - Nifty and Sensex closed the day, down by around 3%.
The opening on US markets is not good either. Dow Jones has already breached 10000 mark and is trading around 9900 levels. If this weakeness persisted till closing, then we are likely to see a major gap down opening in the Indian and other Asian markets tomorrow, as 10000 levels for Dow Jones was crucial to maintain.
In our yesterday's discussion, we talked about major fall in Nifty to 4770 if it breaches 4870. We had just seen the exact happening today with Nifty June contract making a day's low of 4765 before briefly rebounding to 4790. Technically though, we are sitting on the broader support band for Nifty between 4600-4800. Tomorrow possible gap down opening may push Nifty down to 4700 levels during early trades, but one must maintain caution and do not attempt to buy / sell Nifty at those levels. One must take 4700 levels on Nifty to evaluate the strength of the market. If Nifty manages to stay afloat 4680-4710 levels with consistent rebounds, then we may Nifty rebounding to 4850 levels. On the contrary if Nifty breaches 4680 and sustains there for half-an-hour or more, then fresh sell positions on Nifty can be taken with stop-loss of 4725 and target price of 4620.
Options traders can sell both Nifty 4700 Call and 4700 Put and buy 4500 Put to hedge the position. This strategy will come into losses if Nifty crosses 5050 levels. This level can be taken as stop-loss for the strategy. On the downside, the maximum profit if Nifty retains between 4700 and 4500.
There are two stocks that really look interesting at the moment are DCHL and NDTV. Both the stocks have corrected quite a bit in last few days and it is likely to give a small rebound in the coming days. DCHL has already entered its strong support zone of 105-120. One may buy this stock with stop-loss of 102 and target price of 140.
NDTV too looked strong at the current levels. The stock has corrected quite a bit in last few days and now likely to see some rebound in the coming days. One may buy this stock in 93-98 Rs range with stop-loss of 86 and target price of 115.
Wishing you a great trading day tomorrow!!! Shaba Kher...
The opening on US markets is not good either. Dow Jones has already breached 10000 mark and is trading around 9900 levels. If this weakeness persisted till closing, then we are likely to see a major gap down opening in the Indian and other Asian markets tomorrow, as 10000 levels for Dow Jones was crucial to maintain.
In our yesterday's discussion, we talked about major fall in Nifty to 4770 if it breaches 4870. We had just seen the exact happening today with Nifty June contract making a day's low of 4765 before briefly rebounding to 4790. Technically though, we are sitting on the broader support band for Nifty between 4600-4800. Tomorrow possible gap down opening may push Nifty down to 4700 levels during early trades, but one must maintain caution and do not attempt to buy / sell Nifty at those levels. One must take 4700 levels on Nifty to evaluate the strength of the market. If Nifty manages to stay afloat 4680-4710 levels with consistent rebounds, then we may Nifty rebounding to 4850 levels. On the contrary if Nifty breaches 4680 and sustains there for half-an-hour or more, then fresh sell positions on Nifty can be taken with stop-loss of 4725 and target price of 4620.
Options traders can sell both Nifty 4700 Call and 4700 Put and buy 4500 Put to hedge the position. This strategy will come into losses if Nifty crosses 5050 levels. This level can be taken as stop-loss for the strategy. On the downside, the maximum profit if Nifty retains between 4700 and 4500.
There are two stocks that really look interesting at the moment are DCHL and NDTV. Both the stocks have corrected quite a bit in last few days and it is likely to give a small rebound in the coming days. DCHL has already entered its strong support zone of 105-120. One may buy this stock with stop-loss of 102 and target price of 140.
NDTV too looked strong at the current levels. The stock has corrected quite a bit in last few days and now likely to see some rebound in the coming days. One may buy this stock in 93-98 Rs range with stop-loss of 86 and target price of 115.
Wishing you a great trading day tomorrow!!! Shaba Kher...
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