Update for 23rd February 2011

 Nifty is Still in the No Man's land ?

• Nifty futures opened lower on Tuesday due to the all round losses in Asian markets on the back of the rising crude prices . 
• Nifty contracts recorded an intraday low of 4456 in the morning session before trying to test the previous day's last traded price / closing price. 
• However, this test ended at 5520 thereby leaving a subtle gap between Tuesday's high and Monday's last traded price / closing price. 
• These subtle gaps, especially when such gaps occur near the top of intermediate rallies, may indicate weakness on the following days. ( However, such gaps might not have much effects in a sideways moving market. )
• Nifty futures recorded a fresh intraday low of 5428 in the afternoon session before recovering to close at 5476. 

   Nifty Futures - Intra-day Chart   

      Nifty Futures  - Daily Chart 

Update for 22nd February 2011

 Yet Another Rally and What Now ?

• This update includes only the bare essentials due to some constraints. Readers are requested to kindly bear with the short update.
• Yet, this author is inclined to repeat some quotes from the previous post. " ....the market is still in the bullish area of the charts and some of the upward momentum might still be out there. Therefore, it seems that if the market is able to hold the 5400 level, it may recover and try to test the resistances above before deciding about the future direction by the time of budget."
• And this is exactly what happened on Monday's trading.
• Since this author was away from the trading action today, due to some personal exigencies, he is refraining from making any further market commentary in this update. However, all usual charts and data are still here. 
• However, here is an unavoidable comment. Although the union budget might become a non-event from the market's point  of view, it might still attract some avoidable event risk. Therefore, traders are advised to keep only very light positions,  preferably of the long option type. The increase in the India VIX also points in to the direction of the market's self adjustment to face the perceived event risk associated with the budget. The increase in implied volatility ( IV ) as indicated by the India VIX may affect the profitability of any such long option positions negatively, if no significant movements happens in the market after the budget.

   Nifty Futures - Intra-day Chart