Go contrarian with a Nifty bearspread

 Index Strategies
The Nifty closed at 3805 points on Friday after threatening to see a correction. Technically speaking, the market seems likely to rally till 3850 before it sees a decline.

 While volumes have dropped in the spot market, the vast volumes generated in both the futures market as well as in Nifty options suggest that the speculative focus has completely shifted to the derivative segment.  The first signal of a market top is usually narrowing. The second signal is always intra-day volatility. As of now, that is not clearly evident. The daily high-low range of the major market indices has not been very much and there have not been any major swings in the trading sentiment either.  In the futures market, the November Nifty is held at 3814, December shield at 3815 and January is at 3818. This positive cost of carry and premium on the futures contracts is unusual