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Market Outlook -
May 04,
2010 |
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Barring the positive cues coming from the
international arena, the Nifty looks weak and
shows that it can even break 5200 to test the
support around 5170/60 levels.
In today’s trading, the two key levels to watch
out for would be 5206 on the downside and 5257
on the upside. Till such time, the Nifty goes
beyond 5257 and stays there the threat for a
fresh downswing continues to remain. In fact,
the range between 5253 and 5267 is where bears
are likely to mount major attacks on any attempt
by the bulls to push the Nifty higher. Once
above that range then two resistance levels
above 5267 would be 5278 and 5294 before it
tests 5300 and beyond.
The fact that the open interest (OI) for Nifty
May 5300 through 5500 call options has gone up
in huge numbers is an indication how confident
they are about the Nifty scaling lower levels or
staying below 5300 during this settlement. The
OI for 5300 has moved up by over 11 lakhs, for
5400 strike and 5500 strike prices the numbers
are six and five lakhs respectively.
If you go by addition in OI in Put options,
4800-strike has added 9.5 lakhs, it shows that
option writers are expecting a fall in the Nifty
to a maximum of 4800 during this series.
However, we continue to maintain that till such
time 5100 level is decisively broken it is bit
too premature to think that such a big fall is
likely.
Rajat K. Bose |
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| Notes: |
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All prices relate to the NSE, unless otherwise mentioned. |
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Stop-loss levels are given so that there is a level below/above, which the market will tell us that the call has gone wrong. Stop-loss is an essential risk control mechanism; it should always be there. |
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Book, at least, part profits when the prices reach their targets; if you continue to hold on to positions then use trailing stops to lock in your profits. |
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Don't chase a stock, if you are unable to buy a stock because it hits circuit levels on successive days, don't buy that. |
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The analyst and his clients may or may not have positions in the securities mentioned above. |
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Trading involves considerable risk. Trade at your own risk to the extent you are comfortable. The analyst shall not be responsible for any losses incurred for acting on these
recommendations. |
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Rajat K Bose
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