POSTED BY: SACHIN S. JAMBOLIKAR.With interim Budget on the anvil on 16 Feb 2009,Volatility will be the ruler and definitely would hold hands tied to all traders,since speculation are still rife along the counter regarding Reduction in Capital gains Tax,STT(Security Transaction Tax),FDI favouring decisions to name a few.
I feel Nifty may open flat and with a flatish type of gains but will gain momentum as time progresses and most probably during the Budget reading Hour in the assembly.Nifty has already made its intentions clear regarding breaking out from the range to close comfortably above 2900 the last week.
However this short term trend of Bullishness should not at any cost be misunderstood as the bearish phase is the flavour of the season and this rallies are interim bear rallies which as per my thought may fizzle out as sooner as 18-19 Feb 2009,whereby all your long positions had to be squared off or have to be trailed by stop loss 2910 on the downside.
No bullishness should be considered at the moment unless Nifty breaches 3250 on the upside,where it made previous high and further going by Lower Highs and Lower Bottom theory I don't reckon Nifty to rally past 3250 .
Traders are adviced to maintain a strict stop loss of 2880(Spot) on all long positions or maintain Short postions with a broader stop of 3147 on the upside,with stop losses strictly followed a mandatory in Equity markets with mounting Volatility Index.
HAPPY INVESTING.
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