Nifty Views for 21-Jan

Hi Friends,

Last few days, Nifty had been trading a 150 point range, hitting SLs and kicking out both bulls and bears. FIIs have been on selling spree and DIIs have been taking the supplies smartly. Breakout of this range of 2700-2860 is important now to get a good trend to trade. From options data, Looking at the writing in both calls and puts, it shows big traders are not banking on any big moves but are trying to make money out of the range bound move by eating away the premiums. Now one of the expected event of Obama inauguration is over and couple of other events like RIL results and RBI policy outcome is awaited.

Technically, the Wave 5 down that started from 3150 is now on with a possible target of 2500-2600 levels. It will have subwaves up and down and not a one way move. The subwave that started down from 2868 has targets around 2630 levels which can come this week. Crossing 2868 now will negate this and crossing 3150 will negate all the bearish views. Anyway, any positional trade in this kind of market, play only with a hedge. Having a hedge has 2 advantages. It helps you escape with controlled losses if the move is on opposite direction and also lets you pyramid your position by adding shorts at higher levels if required using the profits in the hedge and by rolling over your hedge to lesser premium strikes.

We have taken a positional trade of Nifty future shorts and Nifty Call longs, expecting the range to be broken on the downside. The position will start making good profits, if and when we break 2700.

For intraday levels to trade, please visit TSR blogs http://stocksmakingmoney.blogspot.com/ and http://owlcalls.blogspot.com/