Technical analyst, Rajat Bose of rajatkbose.com spoke with Latha Venkatesh and Sonia Shenoy of CNBC-TV18. He shared his reading and outlook on the market and also gave recommendations on various stocks.
Below is the transcript of the interview.
Latha: What is the strategy for the Nifty this morning?
A: I would see whether 8,212 to about 8,189 where the 200 day exponential moving average is located, if that is breached then it would show some weakness. Otherwise what appears to me is that throughout this week, you cannot pre-judge what the market is going to do. It can do N number of things, it can go both ways, we should be prepared for all that.
Having said that, yesterday in the options statistics it favours the bears. After that huge rally from 8,137 to about almost close to that nearly 100 points rally that happened -- 8,326, you would have expected a lot of Put writing. Contrary to that expectation only 6 lakh Puts were written between 7,900 and 8,400 strike.
On the other hand, 8,300 to about 8,800 strike calls we have seen an addition of 3 million units in open interest (OI) yesterday. This definitely doesn’t show a very pretty picture at least for the bulls and yesterday’s formation was an inside day formation.
Generally, this kind of a formation gives rise to a big move and that big move generally happens within the next couple of trading sessions. Meaning today and Monday by that time, we would be seeing some kind of a big move that direction is not known because this is a two-way volatility that we are experiencing.
My point is that buy weakness, sell strength. When I say sell strength, I mean 8,250 or around that level one can take a short position and around 8,150 one should go long.
For stock specific ideas, watch accompanying video...
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