Market Outlook 23rd October

Oct 22, 2013 No Comments by

Like yesterday today also Nifty traded in a very narrow range of just 39 points. Each and every trader is expecting a big move in the market. The bulls are expecting it to go above 6300 while bears are expecting it to go below 6000 levels. For two consecutive days Nifty has formed a Doji (closing almost flat) which shows indecisiveness in the market.

Wipro reported its numbers after market hours which were better than market expectation. US job data also came out. Only 148,000 new jobs were added against an expectation of 180,000. This combined with the political turmoil has given a hope that QE tapering would be deferred to next year. So, we are seeing a positive tick in US markets.

October expiry is very near. The flat movement by Nifty is frustrating the traders. All the option writers are eating into the premium of both calls and puts on decreasing time value. Expiry is just 7 trading sessions away so the premium decreases very rapidly if Nifty remains flat. I will advice all the traders to trade in November options as we don’t know when the next big move will come. The probability of next big move is more on the downside but that may come tomorrow or next week or after 10 days. So, its better to play safe rather than speculating that the market will jump tomorrow itself.

All the people trapped in the market since 2008 and later will use this market to exit their holdings. So, a small correction might turn into panic selling. The upward trend has taken a pause. So, the momentum that the market had is lost now. Nifty is at such a high level that it needs some very powerful positive news to break through these levels. While some small news may also trigger panic selling. As of now we can just watch and wait. Caution and patience are the only two things to keep in mind right now. Don’t get carried away by the analyst’s forecast of Nifty touching 6500 or 7000 levels.

 

 

 

 

 

 

 

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