Nifty futures didn’t managed to close above 5888 even the volumes were suggesting fresh short buildup (78.6% retracement level of 4-1-2011 High to 11-2-2011 Low) mark yesterday. This may result in some profit booking, pulling nifty towards 5802 and then 5775 levels. As nifty is now consolidating between 5900 and 5775 level, we expect nifty to once again face resistance near 5900 level, hence selling will pull the broader markets to lower level soon, targeting the 5775 zone. So seeing this as a good trading opportunity we recommend to accumulate nifty 5900 put near 67 level for target of 84 and 91. A strong downward momentum is expected once again nifty future close below 5888 level today.
Our Recommendation: Buy Nifty 5900 put near 67 for targets 84 and 91. Keep stop loss near 56 level or exit this call option if Nifty futures seems to trade/close above 5909 level.