NIFTY 50 INDEX – CMP – 10800
The
nifty index is looking overbought for the time being and we believe its time to
exit longs and possibly enter short positions, it can be done by shorting calls
which is best way, and other relatively pricey method is buying puts.
At the
same time we maintain that the market is in sideways, low volatile, non trendy,
low volume, range bound phase, and likely to remain so with only some intraday
ups and downs with more and more individual stock moves. The reaction of
markets to RBI governor resignation and the slack performance of ruling BJP
party in 5 state assembly elections does not say anything but reinforce the
same fact. We believe the oil and gas and some other beaten down sector would
benefit with the sideways market and may rise along with some other beaten down
NBFC stocks. The market may rise only due to lack of short selling, and will
tank due to lack of buying as stocks hits resistance in due course.
In case
market gaps up tomorrow due to oversold European and Asian markets bounce back
and non negative reaction to BJP losses in election, then we may see 11000
nifty level and domestic bout of stock buying for few weeks with same range
bound non momentum trend.
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