Trading strategy in Volatile Market

Market shown that it is 'Supreme ' and made mockery of most of the analysts . Globalization took toll on Indian markets. Most of the analysts including me, were not comfortable with the way market was trading above 4200-4300 and were of a view that market will go down and try to test 3800-3850.

Market did the same but not in the way everybody thought. It was going down like falling the house of cards. IF that was not enoguh, the V shaped recovery after making bottom near 3800 made most of the players on wrong foot.
The non-stop news coming from US ,making players unable to take any sort of positions be it long or shorts. Daily Gap up & down in Indian market ( curtesy Dow Jones) made all investors, traders & Players like HNIs, Large traders or small Fund managers very uncomfortable.

Market shown its Suprimacy , So players has to go to basics. The first rule 'Bull Market has no Resistances and Bear market has no Supports'. The supports were breaking so fast in 6-7 days of downfall from 4500 to 3800 that the levels were just numbers and no supports.

Second Rule - In bear market relief rallies are too fast and vicious. The same things we are observing now, we are about open a good gap up on Monday . So we are retracing fast in 3 days to the fall. To add to the 'Firangi induced' volatility, is our last week of expiry. So every player will be ready with his position to cover on or before expiry as future look very uncertain.

FIIs are Major sellers in Market causing Rupee to depreciate as much as 15% in last few days. However IT stocks are not able to gain much because sentiment is much hampered for these stocks as much of business for them is from US ,and everybody is suspicious about the health of US companies to spend much on IT development . This would have been a boon for IT companies as they were to have Super profits of 15 % due to depreciation of Rupee.

Trading strategy : Last few months It was looking like market moving in a range with small volatility. So major HNI and Small Fund Managers were happy in selling Options ie calls and puts to get 'COOL' 3-4 % of profits in a expiry. This time many of them had burnt fingures because of two way movement. They had to go for hedging/ counter hedging and made things more complex.
While doing this one tends to forget simple rule that 'OPTIONS WRITING PAYS ONLY IN NON TRENDING MARKETS'. One can not be stuborn with markets and make a single strategy (like Options writing) to earn in every type of market.

It is better opportunity ( & simple too) to play with plain Options ie calls and puts strategy like Strangles, Straddles etc. Plain calls and puts are paying much more with limited risk .

Now we are moving in last week of expiry and are about to open with a gap up on Monday. Technically there are series of resitances starting from 4330 to 4550. It is advisible not to Fight with market and Play with simpler tools like Options, when we move 100 - 200 points in nifty in a day. (Those watching charts can watch Candles & gaps in daily charts)

Hoping this write up will be eye opener and Wishing all Happy and Safe trading.

Nifty Futures for Sepetember

Nifty Futures has a good support at 4210 -4150. The trendline support looks good.
Nifty can move up, on the back of fall in crude prices. ( But Dow is not supporting as of now !!!).

One can expect a possible pull back (may be on Thursday or Friday).

Nifty Futures has a rest at 4650 --4725. It will require much efforts to cross these hurdles.

One can go long on pull back ,near the supports.

Nifty Futures for 25 th Aug to 30 Aug 2008 : SG

Nifty futures may open gap up around 4390-4400 on monday because of strong US markets. We are entering in the Expiry week ,So Some Volatility is expected.

The Nifty has a resistance 4400>>4465>>4515 .The suports are at 4330>>4310 and Finally 4250.
This being Expiry week and we are opening Gap up and directly near resistance of 4400 . One should be cautious at higher levels.

Buy on DIPS only can be the strategy.
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Nifty futures for the Week 11 to 14 th Aug -- SG

This is the truncketed week because of holiday on account of Independance day ..Nifty futures may open gap up around 4600 on monday because of strong US markets.

The Nifty has a resistance around 4630 >>4656>>4695>>4720.
The suports are at 4590>>4565 >>4515 and then 4470 >>4440

Be careful as this is Truncketed week . (Small week - Big Week End)

Unitech going towards 220 ? --SG

Inverse Head and Shoulder is visible in Unitech. This is a bullish signal.

If Unitech is able to trade above 176-77 for a day or two , it can see the targets of 210-220 range.

Trade(Swing):
Buy Unitech if it trades above 177 with Stop loss of 170 , for a swing target of 210 to 220

Nifty Futures -August tgt 4700>>4900

Nifty future is looking good on the charts. If it manages to trade above 4535 for a day or two, we could safely say we can see 4900 in August.

With Crude cooling down and World markets stabilizing, there is a high probability of Nifty future moving up and going toward 4900. There is a rest at 4700, if NF is able to cross this rest it can show next targets of 4880-4920.

On the down side there is a good support at 4110 to 4070.One can buy at dips with suitable stoploss.

I will try to post some Options Strategy at dips, so that the risk is reduced much and one can gain for bigger targets.

UPA Winning Vote of Confidance? -The Charting Way---Santosh Gundecha

It is said that charts speaks. Now can we have better event than this (Vote of Confidence)? Today Nifty Futures just broke Falling Wedge on upside at 4050 levels. We are still on border, however we have broken on upside. The next targets are coming at 4185-4220 and then 4320.

I am not looking at any other view or news. Just trying to read chart. It is a difficult task but I am making an attempt as a Case Study. If we trade above breakout level of 4050 on Monday and Tuesday too , we can safely assume that UPA IS WINNING the vote of confidence.

I know I am making a big statement . All analysts will start saying this , after result is declared.. I am making a view with my neck out .

The other view:
The other view I am saying now , which u all will say , is contradicting to my earlier view but please read between lines. We are more intersted in markets, and its movement. If we trade above 4050 on Monday and Tuesday ,we are surely going up..Let the result of UPA be any ways. May be we will have some blip on 23 rd and People get trapped in shorts and market start moving up. So I will suggest to be careful in shorting after voting is done.

This is all my guesstimate, and attempt to read chart. The condition here is market stays above 4050 for two days.

The last but not least..My favorite subject-- Astro views.. Lets hope Saturn and Mars are cooling down and helps market.

Disclaimer- This is just an attempt--Pl trade with stop loss in place and make ur own judgement before trading and investing , as this is not a small issue.

Nifty futures for 16 th July

As written continuously market is undergoing through a very bad phase from varius aspects. we had breached a big support for Nifty Futues at 3810 near close ,which we can say still holding as it broke 3810 in the last 5 minutes of close.
Now for today again 3810>>3750>>3700 are supports . on upside Nifty have many hurdles to corss.
Resistances for Nifty futures being at 3840>3880>3920.

I will advice traders not to look for short lows.Markets looks oversold.

Nifty Futures for 15 th July---Santosh Gundecha

As written in my earlier report Volatility is at its best. Bouts of buying and sudden selling is witnessed daily. For 15 th July Nifty Futures can take support at 3915>>3870.
The resistance for the up move is at 3980 >>4010>>4045 and then at 4090--4100 .

We will open big gap down . This is what I have given in my astro- techno update yesterday. Nobody had expected market to open such a big gap down , I know many ,who had gone long overnight yesterday . This should be avoided .

Those who wish to trade nifty, can try to buy near Supports given above in report ,after the initial gap down. They can books profits at the resistances given above or exit when momentum halts. Better use of Stop loss and trail it for maximum benefit .

These are the days of high volatility, so when one initaite the position should have a close watch on trade and use Stop Loss judiciously without fail.

One can try to buy Options in most beaten stock in techs like Infosys or Satyam in the dips. Market has a tendency of over reaction. I will try to post some call in option live if possible. Do not forget to use Stop loss in Options too.

Nifty Futures for 9th July ..Santosh Gundecha

From last one week we are moving in a range of 3800 to 4100. On daily charts daily there is a Black candle followed by White and again Black candle. The daily volatility is because of international markets as well as Big internal Political chaos. And Media is adding fuel to speculation on political front.

Break on either side can give good move .( This can happen once certanity/stability is established on political front.) The latest news is PM is in favour of having vote of confidence on 11 th July. Lets see what happens and how much 'Horse trading' takes place.
So again my 'D' Dates of 15 th to 18th July ( Astro view ) is crucial it looks. We are hitting Bulls eye.

NIFTY FUTURES FOR 7th JULY----SANTOSH GUNDECHA

As written earlier for 4th July’s Nifty Futures, I had said ‘The political drama continues’. It is still continuing and looks it will go on for some time ( Till at least 15th July as per our Astro guess? ).

But this time political situation looks a little different than it used to be earlier especially in crisis. It looks little better and stable as of now. (The silver lining which was looking on 4th is looking more brighterJ. But as said earlier ‘nobody can be sure of politicians and take them granted’. But let’s hope for better as it looks so.

Nifty futures for 7th July , if trade above 3980 it has targets of 1) 4045 2)4080-4100 3)4180

But if we trade below 3980 we have support of 3940-3910 and then 3870.


For the week we can see targets of 4230-4330 on upside and if it moves south ( thanks to political chaos) we have good support at 3810-3750

I am in favour of buying at dips nears supports…