Indian Market on Monday did as per our expectations. One could have seen fresh buying in the last one hour of trade with indices close towards day’s high on Monday. Rate cut by the Reserve Bank of India provided much needed momentum to capital goods, power, realty and banking stocks. All the sectoral indices ended in the green.
Bombay Stock Exchange’s Sensex closed at 10,358.75, up 5.83 per cent or 570.69 points. National Stock Exchange’s Nifty ended at 3057.15, up 5.95 per cent or 171.55 points.
The current rally has been fuelled by short-covering and hence it has a very limited upside. The Nifty is expected to raise another 50-100 points at most or at slight global pressure downturn will start, where it could be under selling pressure.
What should a trader do now?
- It is simple as per our reco yesterday; a trader must have bought Nifty PUT option or SHORT Nifty Future. Tuesday is expected to be either flat or down 1-2%. In the recent time Indian Markets performed better than other global peer hence if US or European market goes in RED, one can see the beginning of selling pressure in India markets too.
- Stay invested with PUT or SHORT future; don't worry even if Nifty moves 50pt upward on Tuesday, fresh position SHORT/PUT can be build at these levels.
Wall Street started November on a cautious note Monday, with stocks fluctuating in a narrow range following a weak reading on the manufacturing sector.
-Sharan G, Technical Analyst.
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