NIFTY is still in positive trend. It had again respected 7590 level today and there was strong buying during end of the session.
It did not hold above 7700 too. But it seems just a matter of time. Hold strangle strategy till it closes above 7700 on EOD basis and if it crosses 7700-7705 around 3.25 pm then follow the step as advised yesterday. If it doesn't just hold.
Change in open interest of 7700 CALL was above 870,000, among highest open interest, so one can hold for a day and wait if NIFTY closes above this range conclusively tomorrow. It is possible though, because FIIs are buying and in no mood of profit booking.
One of the reason could be FIIs have not made lot of money in this rally and now they have to average their earlier investments. Because when FIIs started investing, Rupee was between 64-68 and not had corrected more than 5%, so NIFTY has to gain more than 7 to 8% for them to be profitable accounting for tax component. So it is in FIIs interest to buy in stocks and hedge the bets by derivative strategies. This is leading NIFTY movement in northward direction in spite of not very positive cues on domestic (in fact monsoon worries which are beyond scope of control of NAMO) and international front.
Till the time of writhing this blog, all global indices are in red but SGX NIFTY is trading in green. This will reflect in our NIFTY tomorrow. There could be about 100/120 points upside from here and it could be more if macro data published tomorrow is encouraging.
Yesterday NIFTY shown hanging man pattern, technically it was invalidated as it broke yesterday's high and made fresh high. NIFTY is again in uncharted territory and as mentioned it could go higher if 7589-7590 is not broken.
However, NIFTY is trading at very high levels and no domestic investors are in mindset of huge investment. Any black spot in macro data, or confirmed negative news on monsoon could activate Wolfe wave pattern. It can still go to 7820.
What if it does not cross 7820?
It could see drop till 7100.
How to play this pattern with very low risk?
A safe way to do this as follows. Please ensure NIFTY goes below today's close 7602 before entering in to this strategy.
Buy 7500 PUT around 43 and Sell 7300 PUT around 23;
Maximum loss could be Rs. 1000/- but if NIFTY closes below 7300 maximum profit will be 9000/-, BE point 7480.
Disclaimer: This blog does not take any responsibility of your profit/loss
It did not hold above 7700 too. But it seems just a matter of time. Hold strangle strategy till it closes above 7700 on EOD basis and if it crosses 7700-7705 around 3.25 pm then follow the step as advised yesterday. If it doesn't just hold.
Change in open interest of 7700 CALL was above 870,000, among highest open interest, so one can hold for a day and wait if NIFTY closes above this range conclusively tomorrow. It is possible though, because FIIs are buying and in no mood of profit booking.
One of the reason could be FIIs have not made lot of money in this rally and now they have to average their earlier investments. Because when FIIs started investing, Rupee was between 64-68 and not had corrected more than 5%, so NIFTY has to gain more than 7 to 8% for them to be profitable accounting for tax component. So it is in FIIs interest to buy in stocks and hedge the bets by derivative strategies. This is leading NIFTY movement in northward direction in spite of not very positive cues on domestic (in fact monsoon worries which are beyond scope of control of NAMO) and international front.
Till the time of writhing this blog, all global indices are in red but SGX NIFTY is trading in green. This will reflect in our NIFTY tomorrow. There could be about 100/120 points upside from here and it could be more if macro data published tomorrow is encouraging.
Yesterday NIFTY shown hanging man pattern, technically it was invalidated as it broke yesterday's high and made fresh high. NIFTY is again in uncharted territory and as mentioned it could go higher if 7589-7590 is not broken.
However, NIFTY is trading at very high levels and no domestic investors are in mindset of huge investment. Any black spot in macro data, or confirmed negative news on monsoon could activate Wolfe wave pattern. It can still go to 7820.
What if it does not cross 7820?
It could see drop till 7100.
A safe way to do this as follows. Please ensure NIFTY goes below today's close 7602 before entering in to this strategy.
Buy 7500 PUT around 43 and Sell 7300 PUT around 23;
Maximum loss could be Rs. 1000/- but if NIFTY closes below 7300 maximum profit will be 9000/-, BE point 7480.
Disclaimer: This blog does not take any responsibility of your profit/loss
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