NIFTY – June Series
by SUMIT GUPTA on May 26, 2011

Today was the expiry date for the May 2011 derivatives series. This month has been quite eventful. While at the begining of this month, I was a little bullish, it turned out finally to be a bearish month.

Excerpt from my March 28 2011 post:

“While some experts might say that this is sign of strength, I have my own doubts. Volumes are lower than the average 200 day moving average volume. Normally, when a resistance is broken, it is on HIGH VOLUMES showing confidence of people buying. Volumes comes from institutions / FIIs / Professional investors buying. Low volumes indicate involvement of retail investors, which mostly are buying because they ‘hope’ the market to go up.

In my view, NIFTY is likely to open with a gap up on Tuesday/Wednesday, 29th/30th March, touch 5800 making a Double TOP with 25th Jan HIGH during the day and then close near the LOW of the day, and perhaps below the close of previous day, with HIGH volumes. If that happens, then it is expected to retrace back to Target 1 – 5200 and Target 2- 4600 by 6th May 2011.”

While I must admit that I was wrong in calculating the date i.e. by 6th May, NIFTY has already retraced to 5328 today’s (26th May) LOW. If it wasn’t an expiry date and short covering didn’t happen, we would have seen market closing either flat or negative. It is exactly 60 days from my last post that we are approaching another pressure date. If you see 28 May 2010 LOW, we are approaching the anniversary in next 1 or 2 sessions. Would we see a black Friday or Monday, time will tell. My guess is, it will be Monday that we see a sharp decline. So, target 1 will be achieved, soon.

Time to go short, target is 5125-5150. NIFTY needs to touch this level, atleast, to complete it’s 3rd Section. I won’t be surprised, if NIFTY sheds 150+ points in next 2 sessions. Some Technical and professional analysts might tell you that the market is oversold. But I am sure, it’s not time to go LONG and definitely, not for investors. They should wait for a week or 2 and I am sure, they would not repent it.

Short Trade NIFTY. 300 points can give you Rs. 15000 per lot