Market was witnessing high volatility; it is partially due to overbought situation, but it is getting strong support at 3635, 3600 and 3590 levels. The key resistance is at 3720 and 3745. If these levels has broken Nifty has resistance only at 3800 -38900 levels.
There are six working days before election results, and final exit poll results will come on 14th or 15th of may 2009. This is the right time to sell your valuable stocks and switch over to its call options. If you are holding 200 shares of Infosis, sell them at the current market price and buy Infosis 1560 call at Rs.70 or 1590 call at Rs.55. if election results are bad, then market may face heavy sell-off, Infosis can also fall,. If so you may tend to lose only Rs.70 X 200 = Rs. 14,000. Or otherwise you should hold the stock and buy 1560 put at Rs.73. if not you should hold at least 100 Nifty at the money put option in your portfolio.
If we use probability at this juncture the probability of Nifty to move above 3920 would be 30% and probability of Nifty to move below 3397 would be 25%.
