On the Indian Stock Markets. December 23.

The followers of this blog are reminded that the settlement of the December 2013 Future and Options series is on December 26 and that this being a truncated week as the markets will remain closed on December 25 on account of Christmas, the markets may turn erratic and one may exercise caution. There may be extreme fluctuations in prices both due to settlement and also because volumes may thin out as the major movers especially the foreign fund managers tend to be on leave in the year end.

That being said, the benchmark index must trade conclusively above 6243 mark in the initial hour of trade for the market to go up, in which case the resistances will be at 6316, 6357 and 6430. Otherwise, i.e. below 6243, the market will remain weak and bearish with supports at 6201, 6128 and 6087.

A major resistance is at 6306 and if this is conquered conclusively with good volumes and/or on closing basis, then one may expect fresh longs which will propel Nifty up towards new highs.

Intra-day traders may trade accordingly depending on which side of the 6243 mark the index trades.  In case if Nifty trades above 6243 conclusively then they may trade on the long side but with strict stop loss at 6240. Otherwise they may go short if the index trades conclusively below 6243 in the initial hour of trading with stop loss at 6310.

Short-term traders may stay away from trading in Nifty unless the benchmark index conquers the resistance of 6306 conclusively in which case they may go long with stop loss at 6395. They may also consider trading in Tata Motors on the long side raising their stop loss from 360 to 365 and get out around 386..

Mid-term investors may consider selling 10% of their holdings in HCL Tech at 1290.95 and consider buying HDFC Bank @ 642.6 & 637.25 in small quantities.

Disclaimer: The writers of this column do not personally hold any stock or position in the F&O market and do not intend to benefit in any way by publishing this column. The final discretion is that of the reader and we disown any responsibility for any loss incurred by the reader.