Morning updates for 29th July

WITH EXPIRY CONSIDERATIONS IN MIND, MOST OF THE BIG OPERATORS DECIDED TO GIVE ANOTHER DAY OF PAUSE TO NIFTY, HOWEVER KEPT THE CARROT HANGING AROUND 4600 LEVELS WITH THE STICK AROUND 4525 LEVELS THAT KEPT THE HOPES OF THE THIRSTY BULLS ALIVE THAT NIFTY MAY STILL CROSS 4600 BY EXPIRY AS WELL AS STARVED BEARS HOPING THAT NIFTY MAY CLOSE AROUND 4500 LEVELS. TRADERS MUST REALIZE THAT THE 1 OR 2 DAYS LEADING TO EXPIRY BELONG TO THE BIG INTERNATIONAL OPERATORS & ANY AMOUNT OF HEAD BANGING ONE DOES, THE INDICES WILL ONLY MOVE AS PER THE DESIRES OF THE OPERATORS. SO THE BEST SOLUTION DURING EXPIRY WEEK IS TO WAIT FOR A FALL TO BUY AUGUST FUTURE AND AUGUST 4600 CALLS & AS INDICES MOVE UP THEN BOLDLY SHORT JULY 4600 CALL & HOLD BOTH AUGUST & JULY 4600 CALLS TILL EXPIRY TO POCKET THE ENTIRE COST OF JULY 4600 CALL. SIMILARLY AS NIFTY RISES ONE CAN BUY AUGUST 4500 PUT AND AS NIFTY FALLS, BOLDLY SHORT A 4500 JULY PUT AND HOLD BOTH AUGUST & JULY 4500 PUT TILL EXPIRY TO POCKET THE ENTIRE COST OF JULY 4500 PUT.

IT IS WISER TO AVOID OR REDUCE FUTURES TRADING OR WAIT TO TRADE AROUND THE EXTREMITIES OF PREVIOUS DAYS RANGE FOR THE 2 DAYS LEFT FOR THE EXPIRY AS ONE MAY BE SQUEEZED OUT OF SHAPE BY THE HEDGE FUND OPERATORS. BE SURE DURING THESE 2 DAYS, ALL SUPPORT & RESISTANCE LINES WILL BE BREACHED TO EAT UP THE STOP LOSSES. SO INSTEAD OF ENTERING EARLY AND PLACING STOP LOSS, IT IS WISER TO START THE TRADE AFTER THE BREACHING POINT OF STOP LOSS. GENERALLY TRADERS & OPTION BUYERS OF CURRENT MONTH SERIES LOSE THE MAXIMUM DURING THESE LAST DAYS OF EXPIRY.

FOR INTRADAY TRADING ON WEDNESDAY, EXPECT THE DAY TO BE SIMILAR TO MONDAY AND TUESDAY WITH NIFTY GYRATING WITHIN THE RANGE OF 4600 & 4525 WITH PERHAPS A NEGATIVE BIAS. NIFTY MAY FIND INITIAL SUPPORT AROUND 4528 LEVELS A BREACH OF WHICH MAY TAKE NIFTY 4505 LEVELS. ON THE HIGHER SIDE 4600 IS LIKELY TO BE A FORMIDABLE RESISTANCE A DECISIVE BREACH OF WHICH CAN TAKE NIFTY TOWARDS 4655 OR HIGHER LEVELS.

IF ONE HAS A LOOK AT THE INTRADAY CHART ABOVE, ONE WILL FIND THAT 4525 IS A CRITICAL SUPPORT AREA WHICH ALSO IS THE NECK LINE OF DOUBLE HEAD FORMATION. SO A DECISIVE BREACH OF THE NECK LINE AROUND 4525 DURING ACTUAL TRADING MAY ENCOURAGE BEARS TOWARDS MERCILESS SHORTING THAT MAY NOT ONLY BRING DOWN NIFTY TOWARDS NEXT SUPPORT AROUND THE FRAGILE 4505 LEVELS BUT ALSO 4505 MAY EASILY GIVE UP TO SLIDE NIFTY TOWARDS 4484 FOLLOWED BY 4455 LEVELS. SECONDLY 2 DOJIS AFTER 2 BULLISH DAYS ARE FORMED IN THE DAILY EOD CHARTS & THE BASE OF BOTH THE DOJIS ARE AROUND 4528 LEVELS. SO, A DECISIVE BREACH OF THE BASE OF THE DOJIS AROUND 4528 MAY TAKE DOWN NIFTY SHARPLY. SIMILARLY BOTH THE DOJIS HAVE THEIR PEAK OF UPPER SHADOWS AROUND 4600 LEVELS, SO A DECISIVE BREACH OF 4600 ON THE UPPER SIDE MAY SEE A SHARP UP MOVE IN NIFTY.

WITH WORLD MARKETS LOOKING WEAK AND ALSO A POSSIBILITY OF ASIAN MARKETS FALLING ON WEDNESDAY MORNING, THERE IS A POSSIBILITY OF INITIAL FALL IN NIFTY TOWARDS THE DECIDING LEVEL OF 4525 LEVELS. WITH RELIANCE INDUSTRIES LOOKING EXTREMELY WEAK & ITS NEXUS WITH PETROLEUM MINISTRY HAVING BEEN BADLY EXPOSED DURING RNRL AGM, IT IS WISER TO COMPLETELY OFF LOAD RELIANCE INDUSTRY FROM THE INVESTMENT PORTFOLIO TO PICK IT UP AROUND 1500 LEVELS & REPLACE IT WITH CAIRN ENERGY FOR LONG TERM AS CAIRN AROUND 240 HAS MUCH BETTER POTENTIAL TO SHOOT UP IN FUTURE. WAIT FOR CAIRN TO FALL IN NEXT 2 DAYS AS CRUDE IS FALLING & USE THIS FALL IN CRUDE TO GRADUALLY ACCUMULATE CAIRN FOR LONG TERM INVESTMENT.