Nifty
Current level: 4,919
Target level: 4,800
There's support between 4,850 and 4,900. A drop below 4,850 may lead to a test of 4,750 intra-day, though the market should close higher between 4,825 and 4,850. A recovery and pullback till 5,000 could happen by Friday. A bearspread of long 4,900p (premium 76) and short 4,800p (42) costs 34 with a maximum return of 66. Bullspreads like long 4,900c and short 5,000c will be cheaper if the market falls. Take a bearspread with a target of 4,800. Or sell the future with a stop loss at 4,975. Consider a bullspread on Friday.
Reliance Industries
Current Price: Rs 998
Target price: Rs 970
The stock has made a downside breakout on high volumes. The pattern projects a target of around Rs 970, perhaps Rs 965. Keep a stop at Rs 1,010 and go short. Increase the position below Rs 990 and start booking profits below Rs 970. If the stock breaks Rs 1,010 on the upside, it may go till Rs 1,035. So, consider going long.
(The target price and projected movements given above are in terms of the next one trading session unless otherwise stated)