Auto sales: What to trade from Auto pack in futures segment?

Trading strategies for Auto packs in futures segment

Markets edged higher even as the US Govt directed all government agencies to shut down late Monday after Congress failed to find a compromise on a government spending bill.

Market edged up on hope that US will continue its monthly bond-buying program at its current pace, as economic activity is likely to take a hit post government shutdown.

Auto sales numbers are also expected later in the day. Chandan Taparia, Derivative Analyst, Anand Rathi Financial Services, tells SI what to trade from Auto pakcs and his strategy for Infosys in options segment.
 

SmartInvestor : What should be strategy to trade Nifty futures for October expiry?

Chandan Taparia : In this September series Nifty future started its move from 5400 and headed towards 6175 levels, it has seen strong move of 775 points in just 14 trading sessions. But in the absence of follow up buying and positive trigger, market failed to cross and hold crucial hurdle of 6150-6200 zone and slipped to 5820 levels. Nifty future has been taking support around 5820-5800 zone from last two weeks and now holding below or above 5800 would decide further trend of the market. Nifty has negated its higher highs higher lows formation last week and now if sustains below 5800 levels then momentum may fizzle out and it may drift down towards 5700-5666 levels.

Chandan Taparia : Nifty future is near to major support zone and if it sustains below 5800 then we may see a profit booking dip as Put Call Ratio is declining with fresh Call writing at 5900 and 6000 strike. We have corporate result in this month so stock specific movement would be more than the indices. Traders are advised to trade with option to take less risk in such a volatile market. Market is now showing some early sign of weakness so we are advising to initiate 5800-5600 Bear Put Spread to hedge as well as play the negative sentiment of the market.

Chandan Taparia : If it moves above 5960 levels then only strength would be back and it may head towards 6100-6150 levels, otherwise there would a range bound move in the market.

Chandan Taparia : Bank Nifty has recovered from 8350 to 11287 but closed near to psychological support of 10000 levels. If it sustains above 10300 levels then positive move may be seen towards 11000 levels. If it fails to hold below 10000 levels then weakness may continue and it may go down 9600.

SmartInvestor : What are your top picks from the auto pack in the futures segment?

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