Monday, March 14, 2011

Intraday Stock Option Tips

As mentioned yesterday, Intraday Nifty has given bearish breakout from the "Triangle" pattern for last 5-6 trading sessions, however it has got minor support around 5475-5480. Breakout from where can take Nifty to 5410-5420 in near future. 

On the other hand, if Nifty manages to survive this support & moves above 5540 then the bearish outlook will get negated & Nifty would be heading for 5625 & above in coming sessions. Nifty opened on a bearish note with downward gap of 35 points on extremely weak cues from US & Asian markets. 

Nifty not only covered the gap but entered the positive zone also however as soon as the news of earthquake in Japan hit the headlines. Nifty not only crashed by 80 points but futures of the World market also took the beating in sympathy with developments in Japan. Nifty touched an intra day low of 5411 before staging a moderate recovery to close at 5447 about 46 points below the previous close.

As far as, extreme short term charts are concerned, Nifty has been making lower tops & lower bottoms in hourly charts (although in extreme short term higher tops & higher bottoms are continuing).

Under the present technical setup Nifty has good support around 5400 & if this support is violated further decline to 5275-5250 may be expected which is a strong support zone for Nifty. On the bullish side, Nifty has resistance at 5525 & bullish crossover will take Nifty to 5600+ which is another strong resistance zone for Nifty. 

In short 2 levels i.e. 5275 & 5625 need to be observed carefully since breakout on either side can give a move of 250 points in the direction of breakout. 

As far as bar reversal in Daily charts are concerned, stocks like Reliance Ind., Tata Motors, HDIL, TTK Prestige, Satyam, Petronet, Can Bank, IOC, Power Grid, Tech Mahindra have given "Upward Bar Reversal" while Rel Capital, L&T, HDFC Bank, DLF Ltd., Wipro, United Spirits, Patni Computer, Hind Oil, PNB etc. have given "Downward Bar Reversal". 

Stocks like JHS Svangaard, Suryajyoti Spinning, Oswal Chem, HOV Services, Gulf Oil, Kaveri Tele, Koutons, Vishal retail, HSIL, Entegra have shown  spurt during the day with unusually high volumes.

Sector wise, most of the stocks like Tata Coffee, Assam Company, Escorts, Tata Tea, Exide Inds., XL Tele Energy, Mcleodrussel, HPCL, Tricom, Satyam etc. were among the top gainers of the day,  to close in positive territory whereas stocks like Educomp, Hitachi Home, Rel. Media, Surya Roshini, Murli Inds., Sintex Inds., Mphasis, S Kumars' etc. attracted profit booking at higher levels & closed in red territory. As far as, A/D data is concerned it was in favor of bears in the ratio of 1:3 with 369 advances & 1058 declines during the day.

In nutshell, Nifty is locked in 2 different "Triangle" patterns while smaller one has support at 5410 & resistance at 5525 & breakout on either side can give a move of 100 points. As far as larger "Triangle" is concerned it has good resistance around 5620 & support at 5275. Breakout from the "Triangle" pattern is capable of giving a move of 250-300 points in the direction of breakout. 

The fresh developments in Japan will dictate the overall economy of the World in short term which need to be analyzed before making any conclusions. 

The best strategy is to remain stock & sector specific as both bullish as well as bearish opportunities are available at present.

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