Market Analysis of 8-DEC-2010 and Stratergy for 9-Dec-2010

Market Analysis of 8-DEC-2010 and Stratergy for 9-Dec-2010

Nifty future trading at 5925 with -1.4 % change and OI is down by -0.36 %, there was profit booking, and at least no major shorting on Nifty.

CALL OI are increasing and price falling (shorting is being done on CALL), Max OI is at 6000 CE with 86 L contracts in open position, indicates market UPSIDE is cap somewhere around 6000, as of now.

PUT OI are decreaseing and price increasing (short covering ), MAX OI at 5800 PE with 66 L contact in open position,indicates downside support are getting weaker and downside risk are increasing.

26 Nov 2010 - 5690 (Nifty spot low)
6 Dec 2010 - 6069 (Nifty spot high)
38.2 % and 50% retracement has been hit today, 61.8 % retracement is comming around 5834.

If tomarrow global sentiment is positive, Nifty target will be 5956 ( 7 dec, low).
If tomarrow global sentiment is negative, Nifty may touch 5834, if the level is broken next logical target will be 5690, but if u draw trendline it is somewhere comming at 5730-5750 range.

Disclaimer: Personally I am holding long JP Associate, and the analysis is based on option data, which changes everyday and the outlook also changes.

Thanks and Regards,
Subhag Ghosh