Monday, August 11, 2008

The Nifty takes a ride, touching the clouds

A 90 point gain in the Nifty marked today's trading. With this gain, the Index has crossed above 4600, closing at 4625, inside the 4600 - 4700 resistance zone.
Momentum clearly favors the bulls. It is possible that we may see some kind of correction after this 800 point rally. It is also possible that there may be a dip or choppy range bound moves. With all of this, the Intemediate trend remains up, thus buying on dips seems to be the best approach.
With every passing day, the market is reaching a point where buyers may face a loss of momentum. Thus, buying should be done on dips, to ensure relatively low risk.
Nifty futures moved inside a range of just 55 points, probably the lowest range in many days. Low volatility, as I have explained many times, is followed by high volatility. A breakout / breakdown should be expected in the next one or two days. Such conditions are ideal for purchase of straddles or strangles using Options.
In my wealth building blog, I discuss How to manage an investment idea with an actual example for SASKEN.
I hope to post once again before the evening ends! Keep visitng.

2 comments:

piyush modi said...

Does it make sense to take a long trade tmrw after seeing thru iip nos on the expectations of a positive news from SEBI meet on Wensday on P-notes front ?

In the sense, mkts have not really rallied hard expecting any newsflow, so downside would be ltd, & pretty good upside. Maybe slightly out of money calls could be a good option ?

piyush modi said...

Another thing. There is a facility with these blogs which i found on another blog
http://surakshit.blogspot.com/

where one can put in his details, and whenever there is a new post, one directly gets a msg in his email inbox, so he doesnt need to keep visiting the blog to know whether a new post has been put or not. Ofcourse, he needs to visit to read the post, so that ensures that visitors continue to keep coming to the actual site. This might also involve the casual viewer who otherwise wont return after 2-3 visits cause it slips off his mind.

Thnx !!