Market Outlook 29th October

Oct 28, 2013 No Comments by

Nifty broke down below 6150 levels closing at 6100 levels. We have been telling about the break down in Nifty from very long and today it gave a trailer of the movie. Tomorrow we have RBI policy. RBI has made it very clear that it can bear low growth but not high inflation. So, seeing the past month’s WPI and CPI inflation data, a rate hike is definitely on cards. Today’s correction shows that the market is already discounting a rate hike. Still a rate hike would lead to a breakdown in the market.

If there is no rate hike, market might rally 50 to 100 points but again we are not sure markets would be able to sustain those levels. In case of a surprise rate cut, which is highly unlikely markets may give huge upside.

As of now the best strategy is to make a long strangle, buying 6200 call and 6000 put. There will be a huge move in the market tomorrow. So, any of these if becomes in the money option, overall we will have profit. Lets see what RBI has in store.

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