Over the last couple of days, some interesting developments took place in the Nifty. It has scaled to new highs and today closed at its highest point since Oct 2008 lows. Now the big question is whether it can sustain here or not......I had mentioned the resistance levels in my previous posts and so far NF has held on to those levels. Its still trading above 3174 and I am expecting it to touch 3350 first.
Just observe the Nifty cash and 1-month future charts separately. One will find the following:
http://i441.photobucket.com/albums/qq134/Saptarshi_m/NiftySpot.png
http://i441.photobucket.com/albums/qq134/Saptarshi_m/NiftyFutures.png
1. Spot Index shows increase in price with huge increase in volume over the last 3 days.
2. 1-month future shows increase in price with 3 days of decreasing volume.
3. Two lower gaps are created in futures but there's none in spot index.
What can we possibly conclude?
More cash is being put into the equity markets in terms of delivery based buying. This is also supported by FII+DII data....Check
Just observe the Nifty cash and 1-month future charts separately. One will find the following:
http://i441.photobucket.com/albums/qq134/Saptarshi_m/NiftySpot.png
http://i441.photobucket.com/albums/qq134/Saptarshi_m/NiftyFutures.png
1. Spot Index shows increase in price with huge increase in volume over the last 3 days.
2. 1-month future shows increase in price with 3 days of decreasing volume.
3. Two lower gaps are created in futures but there's none in spot index.
What can we possibly conclude?
More cash is being put into the equity markets in terms of delivery based buying. This is also supported by FII+DII data....Check
http://www.bseindia.com/mktlive/market_summ/categorywise_turnover.asp
But there is a little risk ahead facing the 3350 resistance zone; as a result of which traders might have taken hedged positions in the current month futures. Further the current PCR in terms of traded quantity stands at 0.92, which still shows considerable room for upmove.
All in all, one may conclude that this rally should continue upwards but near and above 3350 in NF, one should start having complete or at least 75% hedged positions with either NF shorts or buying Nifty puts.
But there is a little risk ahead facing the 3350 resistance zone; as a result of which traders might have taken hedged positions in the current month futures. Further the current PCR in terms of traded quantity stands at 0.92, which still shows considerable room for upmove.
All in all, one may conclude that this rally should continue upwards but near and above 3350 in NF, one should start having complete or at least 75% hedged positions with either NF shorts or buying Nifty puts.
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