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Market Update:-
Indian stocks surged for the second consecutive day tracking the rally in the global markets after China unveiled a 4 trillion Yuan ($586 billion) stimulus plan for revitalizing the world's fourth-largest economy and to uphold global growth as the US, Europe and major economies hover on the edge of recession.
However, volumes on both the cash and F&O segments of NSE, which hit a five-month low, suggest that players are wary of trading in volatile markets. However, some traders expect a further upside in the build-up of long positions in key stock and nifty futures in the near future.
National Stock Exchange's 50-share Nifty soared 5.89 per cent to close the day at 3148.25. The rally in global markets pushed bears to cover shorts across the counters.
Nifty November futures provisionally ended at a premium of 18.75 points to the spot. The contract price advanced 6.07 per cent with buying quantity higher than selling quantity—indicating build up of long positions. Nifty December futures also provisionally closed at a premium of 21 points to spot.
HBJ Capital's View for Tuesday?
Indian Markets are expected to open flat and fall more than 2-3% before closure or it will open gap down and continue to slip. One can see fresh short position build ups on Tuesday.
- If you are holding LONG/Call on Nifty, better exit with stop loss at 3125. In case if any unforeseen news comes up and market takes upward journey then stay with your long position.
- If you are holding SHORT/PUT on Nifty, stay intact, all the gains during last two sessions will be lost in next 3/4 sessions. You can see Nifty around 3,000 or below this level by this weekend or early next week.
- Fresh SHORT/PUT can be initiates during last trading hour on Tuesday.
Pls read this daily before trading: HBJ Capital’s 5 golden rules for profitable trading.
Good Luck.
-JK, Equity Research Analyst.
2 comments:
Hi JK,
I know you are the expert, but correct me if I am wrong. Short positions were hugely built up starting of this month.And then we saw nifty rising after Ist week, even though Dow and every thng else was falling apart.
Is this a trap for bears?
Dear Mr. Sandeep,
Most of the short position were covered during th last week of Oct itself. In Nov'08 no one has clear idea where the market will take turn, recent rally in india markets were due to global clue and huge liquidity provided by RBI. But buddy, when the real economy itself is suffering there is no way any type of pull back will sustain. One can expect market to see bottom somewhere between jan-mar'09 and recovery might start from may'09 after the central election.
Good Luck.
-JK
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