Equity and Options Ideas for 25th August

Riding the positive global cues, Indian Equity markets went up by 3% on Monday. Commodities stocks are riding high at the moment in the anticipation of possible global economic recovery.

As discussed in yesterday's blog, markets are likely to rise further in the coming days. Dow Jones is sitting close to 10000 mark where one may see major resistance. Till then, we might not see sellers making any major hurdle for the markets. The rise in US markets would thereby have a positive impact on the Indian markets as well and we may see it crossing some intermediate resistance levels.

Taking Nifty as benchmark, we may see Nifty crossing 4750 resistance levels during the current rally. The next major resistance level that Nifty is likely to face is 4800-4850 which could be the major one before 5000. On the downside, trend reversal can be seen at 4450-4500 levels.

Henceforth, we are sitting almost the middle of this band. Traders can go long on Nifty around 4625-4630 today with a target levels of 4680-4690 and stop-loss can be maintaine at 4580-4590.

US-deficit Date due to release today evening
Today, US economic department and US government are separately releasing the data on possible US deficit in next 10 years and their plans to raise money. US deficit is a major area of concern for the economists and investors worldwide and hence, this data would be watched vey carefully.

If markets stay range-bound today, Buy options traders can use strangle strategy to buy Nifty 4800 September Calls and 4500 Nifty september Puts. Sell-Options traders can short Nifty 4400-September-Puts with a stop-loss of around 30% from the current price levels.

Stocks Ideas
Bharat Forge, which was discussed on Friday, hit its target price of 230 yesterday, giving returns of around 6%. Jindal Saw Pipes is sitting close to its target price of 590. Rest of the stocks ideas remain intact.

No further addition to the stocks ideas as we may see some absurd movement in the stocks before expiry.

Wishing you a great trading day ahead!!