Nifty going to retest Oct lows – If you want to make money then just SHORT Nifty or Buy Nifty PUT Option!!!

Just after G20 meet when nothing fundamental solution came out, we suggested our trading community to look for the clear trend in the market and yes, trend has already emerged and it is downward. Yesterday we suggested SHORTING the market at every 3-5% risk and anyone following this must have made money.

The benchmark indices opened on a positive note, traded in the green till the last hour of the trading session, but wiped out all the day’s gains due to selling pressure in frontline, capital goods and banking stocks. Both indices closed in the red but marginally above their support levels. The Sensex closed at 8774 as against the support level of 8700, while the Nifty closed at 2635 as against its support level of 2620.

Efforts by the bulls to revive the market Wednesday were defeated as equities pared intra-day gains and ended in negative terrain after poor opening of European markets. US stock futures too were under pressure.

Market opened higher as some stability was seen in Asian markets. However, lack of conviction in the market was evident from the volatility from the low volumes. Hence, when the European stocks turned red, markets caved in to selling pressure. Bombay Stock Exchange’s Sensex dropped 1.83 per cent or 163.42 points to 8773.78. The index fell to a low of 8732. National Stock Exchange’s Nifty ended at 2619.25, down 2.38 per cent or 63.90 points.

HBJ Capital’s View for Thu:-

1. Since the Indian Market trend is very clear (downward) except fear of short covering anytime before expiry; one should be in the Nifty SHORT position or can take fresh SHORT now also if market opens flat. Market players should be very cautious as markets may rebound on short covering but it will be for a day only because most of the trader will be happy rolling over their SHORT to Dec too.
2. Volatility is likely to continue in near term as the F&O expiry nears. No one is optimistic on the markets. No domestic fundamental factor can help our markets revive, unless the global markets start showing recovery. So, the inflation data due Thursday will be a non-event. Only if RBI comes out with big rate cut then one can see some pullback. Under such situation, that pullback will be for max one day only.
3. Nifty is likely to take support at 2550 and if that is broken then we may re-test lows of 2250. Market mood will change as global markets turned negative. Traders should go short on every rise and cover only below 2550 and investors should start doing value buy at 2550 and 2250 for over a one-year perspective at least.

-Sandeep Jain