Nifty futures has consolidated through this week we have seen the range for this week in nifty future was 4900 to 5166. We would initiate short positions in nifty futures at 5200 levels for downside trading targets as 5000 and then 4949 levels. Nifty has earlier faced strong resistance at 5200 zone so this can be very good opportunity to go short in nifty futures. We are confident that nifty futures will not be able to break above 5200 level easily. Our next week trading strategy will be to search for short selling opportunities as nifty futures is trading below its strong resistance of 5200 level now. Some recovery was seen in global markets on last Friday, this reaction should be seen in tomorrows session. Also on Friday the RBI’s Credit Policy for Mid term was declared it was really surprising to see a hike of 25 basis points bps. Next week we may see some selling pressure in Banking stock such as State bank of India as well as some 4 wheeler automobile stocks like Tata Motors, Maruti. So for now we must keep shorting nifty futures for targets as 5000 and then 4949 levels. Selling momentum may gain strength in most of the heavy weight stocks. This can be a very good opportunity for swing traders who trades on weekly basis as well as intraday traders to add short positions in nifty futures. Placing the stop loss orders just above 5240 level on closing basis only. Taking the advantage of long term down trend, traders should go short on nifty futures near 5200 level. Trading volume was lower as we have seen volatile trading session on last Friday. High risk traders can also accumulate buy positions in Nifty 5200 put options near 112 level for weekly target of 148 and then 172 level. It is also advised to exit this positions if nifty futures closes above the 5240 level for 2 days continuously. Last week some long position were added in nifty futures as there was jump in open interest, we have seen nifty futures added more than 23.7 lack shares to open interest last Friday. So traders are expecting market to move towards 5200 level next week.
Our Trading Recommendation:
Some minor pull back is expected in Nifty futures but up side is capped at 5200 level and trend remains down and traders across the globe are looking for selling opportunities. Technically nifty is having resistance at 5175 and 5200 level and support at 5000 and 4949 levels.
Nifty 5200 Put Option Trading strategy:
Buy nifty 5200 Put option near 112 level for weekly target 148 and then 172 level. Also place stop loss below 84 level or exit this long position, if nifty futures trades above 5240 level only on closing basis.