Nifty update for 25-01-2010

Nifty still remains bearish due to increase in Indian VIX at 5.74% and increase open interest with decrease in the cost of carry which indicates short positions. 5300 Jan call option is showing high buildup due to call writing which indicates traders are expecting more down trend in the market. Market will remain highly uncertain because of implied volatility which has been decreased by around 150-200 basis points for the current series and has marginally increased for the next month contracts in the option front. This uncertainty or negative sentiment may last till expiry of Jan series.

But traders do not care about character or conditions of the market they only think about the levels.

Nifty is resting above its pivot points 5026, if it is stay above 5048 then first target may appears at 5096 and unable to stay above 5048 it may hit 4998. The second target appears at 5150 (Chances are low).
If Nifty resting below 4998 then its first target may be 4963 and below 4963 second target is 4900 (Chances are low). Otherwise it may hit 5060.
If Nifty becomes narrowly range bound then do not take fresh position. You may trade at Stock front.
Nifty is bullish above 5060 and bearish 5015 on daily scenario.

Stock Front :

Earning on shorting
Petronet LNG, Dr Reddy’s Laboratories, Indian Bank, Ashok Leyland.
Rules : Above stocks are bearish below their last day closing.
Entry and exit should be made as per Nifty.
Stop loss : Last day closing.

Earning on buying
Punjab National Bank, Punj Lloyd, Sun TV, HCL Technologies, GAIL India
Rules : Above stocks are bullish above their last day closing.
Entry and exit should be made as per Nifty.
Stop loss : Last day closing.

Caution: Positional trade can be taken when Nifty will stay above 5100.

Best of luck and happy trading session.