Nifty futures has shown a strong downtrend and we are now extremely bearish as technical and fundamentals both are suggesting to enter short positions in current market. This may result in fresh short buildup at every up move, pulling nifty towards 5400 and then 5275 levels. As nifty is now strongly heading towards southward targeting the 5275 level, we expect nifty to break 5400 levels soon in near term, hence selling will pull the broader markets to lower level, targeting the 5275 zone. So looking this as a good trading opportunity we recommend to start accumulating nifty 5500 put near 66 level for target of 82 and 89. A strong downward momentum is expected once again nifty future starts trading below 5478 level today. The petrol price hike by Rs.5 per liter is a bad news for the Indian equity markets, Also the near term range remains as 5570 – 5370 levels.
Nifty Options Recommendation: Buy Nifty 5500 put near 66 for targets 82 and 89. Keep stop loss near 55 level or exit this call option if Nifty futures seems to trade/close above 5575 level.