Monday, October 4, 2010

Trade Plan - October 5, 2010

Another new high made today at 6222 by Nifty and then a negative bias below 6205 spot to close @ 6159.  VWAP @ close is 6206. Nifty should consolidate between 6090-6180-6250 now for the next two trading sessions with a close above 6180 for positive bias to be maintained. The opening range breakout above 6194 on spot gave a good intra day long trade and then between 6180-6205.

1) Gap up opening means long only above 6180 with stop loss of 6155 for target of 6250-6280 on spot levels.
2) Gap down opening and break of 6128 on spot will be first sign of intra day weakness and break of 6100 will be the second sign of weakness and Nifty could test 6090-6050-6035 levels. Stop loss for shorts intra day only will be 6155.
3) Long above 6160 with stop loss of 6127 for target of 6190-6230-6250.  Alternately buying above 6060 with stop loss of 6030 if Nifty "falls to and reverses from" 6035-6050 levels tomorrow for a target of 6100-6130.
4) The premium in futures is quite high and buying on dips is a better strategy rather than going short and getting confirmed reversal from lower levels to initiate a profitable intra day long trade. The level of 6128 will be quite important tomorrow as close is below 6180 and way below VWAP level.  Happy trading!

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