Nifty is in need of complete correction and what we had seen a fall from 5399 to 4786 is just a small trailor. Negative Divergence in Monthly RSI and many other indicators showing big crack in coming weeks/months.
Nifty June 2010 futures were at 5056.05, at a discount of 30.25 points compared to spot closing of 5086.30. Turnover in NSE's futures & options (F&O) segment was Rs 62,506.35 crore, lower than Rs 68,591.35 crore on Friday, the 28 May 2010.
In the near term, the market may remain volatile as uncertainty prevails over the European debt crisis and its wider fallout on the world. Headline risks will continue to play spoilsport with every effort to move higher. As a result, one should not take undue risks at this stage and wait for some more stability.
The Nifty futures closed with a discount of 22 points in comparison with the underlying, the S&P CNX Nifty. Why is the future quoting at a great discount even when it has been rallying for the past four days! This is the month of June in which many Nifty constituents pay their dividends. Equities of many Nifty companies are quoting at a premium to their futures because of the embedded dividends. For example, ICICI Bank and TCS are two such heavy weights whose futures are quoting at a discount. Therefore, the discount of the Nifty future is because of the dividend eligibility of the equities and is a seasonal phenomenon seen every year in the May–June period.
For today, on the upside above 5088, we may see for a 5110 and 5168 level and on the downside, probably we will be headed for 5000 now.
Disclaimer: I have some long positions. Stock trading specially intraday trading is very risky. Trader/Investors are advised to trade as per their own risk taking apetite.
