NIFTY 5 DAYS MOVEMENTS FROM 06 DEC 2010 TO 10 DEC 2010
NIFTY 1 MONTH MOVEMENT FROM 10 NOV 2010 TO 10 DEC 2010
If we see the 5 days movement from 06 Dec 2010 to 10 Dec 2010, Its clearly indicates that after too much bloody session market is re-pumping its blood again and trying to recover from its down side. So it can go up to 6100 from coming days but if we see the one month movement from 10 Nov 2010 to 10 Dec 2010, its clearly indicates market is in under huge bearish mode , if NIFTY breaks 5750, then it can go up to 5600. So we should be very careful on long side with strict stop loss.
So both the trends shows there is very high level of volatility.
So we can do Long Strangle means,
Buy OTM Call + Buy OTM Put
Means, Buy NIFTY 6100 Call Jan Expiry @ Rs. 75 to Rs. 85 (According to Risk Level) Current Market Price on 10 Dec 2010 Rs. 80.80, Stop Loss Rs. 50 + Buy NIFTY 5600 Put Jan Expiry @ Rs. 60 to 80 (According to Risk Level) Current Market Price on 10 Dec 2010 Rs. 75.30, Stop Loss Rs. 40.
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