Derivatives Update: 16.08.2011
Once again Nifty futures closed lower at 5040(5080). Instead of favourable global cues & after long week end, Nifty futures opened higher at 5125, made a high of 5140, went down straight to 5006 & closed at 5040. Weakness in the market persists. Looking to the open interest figures of friday, which went up by around 10 lacs Nifty in a falling market leads us to believe smart people are shorting the market. Technically, we are witnessing lower lows & lower highs from last 3days. More importantly it is not able to breach the gap that it made on 05.08.2011 of 5337-5191. I still hold the view that Nifty futures will try to test low of 4951 which it recently made on 09.08.2011. In case if it is not able to hold this level of 4951, there is every chance that it will test 4835 which is 200 WMA(Weekly moving average). God forbid if it breaks this level than we can see violent breakdown. Last time it broke when 200 WMA was 3785, Nifty went down to 2228 in matter of just few trading sessions. So Be cautious & watch levels very carefully.
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