22.05.2011: Nifty closed at 5386.55after a dip of 99.80 points. But question arise that what should a retail and small trader will do now? Is this the right time to buy or we will see some more dips in last week of May?
It is very clear that 5400 is going to break but we expected that level to break after the current settlement is over. In the new settlement it is difficult to buy those puts at that point of time the bears would strike. However as we have seen it has already broken, however I don’t expect it to fall substantially in the same manner till the settlement but there is no need to buy. We expect a substantial correction after the settlement. Hence, if at all you get some opportunity when you see higher levels, 30-50 points on the nifty, it is an opportunity to get out and not buy into the weakness.
Will 5300 will be new support level?
Usually, such kind of puts act as a support level. Also, owing to the new settlement one could expect weakness going there. The market doesn’t like pending follow up offer. Hence, if government is to divest 5% more, obviously it is going to go through the same route, unless the government finds a different kind of a market, doesn’t sell in this kind of market, however, goes out and issues stocks elsewhere. Hence it will also add to the overall weight.
Is resistance level of 5400 a place to go short or one should short at 5350 level in next trading session?
It is difficult to advice to short. If you are holding some stocks, get out of 60% app. and put 40% money on the side immediately and for that you don’t really have to wait for a particular level to happen as you are expecting the market to weaken. Hence, it would help you to sell at an early date. One can come back at more lower levels,if we found. As we are seeing some more pain in market.
Disclaimer: Investment in equity is subject to risk. Please consult your financial advisor before investing. This material is for learning and updation purpose only.
It is very clear that 5400 is going to break but we expected that level to break after the current settlement is over. In the new settlement it is difficult to buy those puts at that point of time the bears would strike. However as we have seen it has already broken, however I don’t expect it to fall substantially in the same manner till the settlement but there is no need to buy. We expect a substantial correction after the settlement. Hence, if at all you get some opportunity when you see higher levels, 30-50 points on the nifty, it is an opportunity to get out and not buy into the weakness.
Will 5300 will be new support level?
Usually, such kind of puts act as a support level. Also, owing to the new settlement one could expect weakness going there. The market doesn’t like pending follow up offer. Hence, if government is to divest 5% more, obviously it is going to go through the same route, unless the government finds a different kind of a market, doesn’t sell in this kind of market, however, goes out and issues stocks elsewhere. Hence it will also add to the overall weight.
Is resistance level of 5400 a place to go short or one should short at 5350 level in next trading session?
It is difficult to advice to short. If you are holding some stocks, get out of 60% app. and put 40% money on the side immediately and for that you don’t really have to wait for a particular level to happen as you are expecting the market to weaken. Hence, it would help you to sell at an early date. One can come back at more lower levels,if we found. As we are seeing some more pain in market.
Disclaimer: Investment in equity is subject to risk. Please consult your financial advisor before investing. This material is for learning and updation purpose only.
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