Current Trading Strategy on NIFTY Spot @ 5799.75 - 26 Nov 2010

I had suggested that 5820 was the very important level of NIFTY but NIFTY broke this level today and made a low of 5780.35. So the next Major Support Levels are 5723.23, 5556.31, 5248.68 & Major Resistance are 6197.78, 6505.41, 6672.33.

NIFTY Movement From 19 Nov 2010 to 25 Nov 2010

NIFTY Movement From 22 Oct 2010 to 24 Nov 2010

NIFTY Movement From 24 Sept 2010 to 24 Nov 2010

If we see the above movements of NIFTY for different periods its clearly indicates NIFTY is going to be in Bearish mode or in down trend but with high volatility. 

This week we had so many matters at domestic level like as 2G Spectrum S-candle, Adarsh S-candle, Housing S-candle etc. and international level like Korean matters etc. All these are making pressure in the market and manipulating the index at downwards.

So we need to very take care about these, specially taking any Long side position in NIFTY. If taking any Long Position then a Strict Stop Loss should be follow. Be very cautious regarding Long Positions with Strict Stop Loss.

"Korean Matter will panic in the Global Market in Coming days."

So At this condition we can take following Trading Strategy :-

Strategy is Bear Call Spread means, Buy OTM Call+ Sell ITM Call

Means, Buy NIFTY 6000 Call Dec Expiry @ Rs. 60 - 75 (according to Risk Level) Current Market price is Rs. 73.45 on 25 Nov 2010, Stop Loss Rs. 35 + Short NIFTY 5400 Call Dec Expiry @ Rs. 458 - 480 (according to Risk Level) Current Market Price is Rs. 457.70, Stop Loss Rs. 525, Targets Rs. 410 - 365 - 305.

Note:- Buy NIFTY 6000 Call Dec Expiry is a Hedge Position against Short NIFTY 5400 Call Dec Expiry. So Target has not given in it.