Players who have gone short haven't covered their positions instead they prefer to go for expiry with short position, this is one reason why sharp upside of 2-3% which we predicted yesterday didn't happen.
Surprisingly, our markets failed to track the run-up in global stocks, raising questions over sustainability of the recent pull-back. We should not be gung-ho about the last two days’ recovery as this bounce-back has come on account of positive global cues.
In the futures and options space, the current marketwide rollover is about 66%. A pretty lackluster expiry on a positive note, we are starting the next series extremely light leveraged.
In the mean time FED has cut the rate by 50bps to 1% now. This was expected and it is factored, in fact rate cut was never a solution to this crisis, it is more psychological. On can expect couple of days of consolidation in the market.
Indian market will either consolidate around this level for next couple of days or in case if any news comes from real estate companies in credit crunch or FMP exposure to real estate companies or if any MF appears to be in credit crunch etc, we will see fresh round of selling. We need to keep eyes on FII & Hedge funds activity too.
Since the direction in the market is not very clear, we are already at the bottom level but inspite of good global clue today we didn't budge from our position, this gives mixed signal. Hence it would be better to wait for tomorrow to see the breakout eitherway.
BUT, in case if Indian Stock market falls 2% or more on Thu, we would strongly reco trader to go SHORT on Nifty Future just before close of market. If Nifty remains in +ve zone or flat then it is better to wait and watch.
-HBJ Team
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