FRIDAY 17 OCT 2008

Avoid October series and go for November or December series in F&O.
Set up Nifty long straddle by buying Call and Put option of strike 3300 or 3400 or 3500, whichever is nearby. This strategy would require a lot of patience if market moves sideways but should give good returns whenever markets start moving in some direction.
On the other hand, if markets keep moving down then buy only Call options at lower levels.

Some institutional buying may be taking place selectively but it was more of a short covering. The signal lies in the weakness of counters like Reliance Industries which has touched the levels of 1300 yesterday(see tradingthisweek.blogspot.com). We may not get such signals of weakness in the indices but quite a number of stocks have broken levels on the downside that it looks difficult to have a sustainable rallies in them in near to medium term except some relief rallies from time to time. In this volatile atmosphere, it is not advisable to jump in blindly. As said in earlier posts, the Nifty options trading is the best strategy in such conditions.