Tips for traders and investors in the Indian Stock Markets for October 20 2014.

The benchmark index will continue in its short term bearish trend with supports at 7711 and 7524 and our view continues to be sell at every rise. However, at this juncture it may turn volatile with sharp ups and downs on account of a truncated week; the markets will remain closed on October 23 2014 & October 24 2014 resulting in reduced days of the October series of F&O. Moreover the muhurat trading on Diwali evening also is only too unpredictable. Hence one may trade with extreme caution from here on. The overall trend is weak as long as the resistance of 7993 is not conquered conclusively.

The intra-day traders may go long if the Nifty trades above 7798 with good volumes and book profits around 7828. However if it trades below 7760, then they may play it on the short side and book profits at around 7729.

The short-term traders may cover their shorts and book partial profits at around 7711. They may add short positions if the index goes up with stop loss at 7993.

We had been advocating the mid-term investors to rid their portfolio off of HCL Tech and Tata Motors and whoever followed our advice might have seen how exact we were in judging the fall in advance. There was a meltdown in both the counters in the previous session. We had seen it coming. They may now consider continuing placing bid for Bank of Baroda at 845.85, ITC at 338.25 and Lupin at 1235.25 in small quantities.

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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.