The six hundred point run has been without any correction and in dollar terms we have already done 25% from the bottom. Big question is does it still have steam left to take it to 5424 and beyond. We are still in the break out mode. FII provisional figure is a net buy of 1240 cr on 27th'Jan and 1147 cr on day before. A whopping 9,046 cr has been pumped in this month so far vrs 5,954 cr selling by DII.
Going by the way consensus is building on the long side, the first dip to 5102-5006 will be bought aggressively. In the absence of any major news the Feb series promises to be dull sideways consolidation. The range has expanded and we are yet to form the top of the range and then the bottom formation will establish the trading range for the rest of the series.
The opportunity was in showing patience and wait for the dips. Somehow the dips never came and every big daddy is forced to chase or get left behind. Those who got left behind were forced to enter defensively at higher levels. The market is very weak now in the absence of shorts in the system. Only aggressive buying can take us higher.
The big question that arises is how to play this series. Those holding longs want to book some profit from the table. Do we initiate fresh longs here or do we initiate shorts and play for the correction.
Personally, I think opportunity is taking advantage of the low option pricing. I plan to Build defensive positions using puts. Buying 5100 put and shorting 5000 put + 4900 put, should give me enough protection on the up side.
