NEAR BOTTOM ???

Yesterday markets were lost heavily and closed nifty at 3818, sensex at 12526.  FII cash selling was -1662 cr, F&O index future shorts 8.8 lakhs, shorts were added in stocks future also. Over all nifty index future + 18.4 lakhs shorts were added. Global cues Dow lost 157 points and closed near bottom even after approval of bail out deal.

We are at new bottom after January 2008 bull market crash for the third time.  Heavy shorts in Reliance future also shows that markets may fall further this time. See the chart  and one can feel that the nifty may correct up to the level of 2600 and that to with in next march/April as the markets were sliding just within the major triangle.  If the markets crosses out and breaks the trend line upward we may think for cash stocks delivery.  Until then we have to wait for markets bottom out and consolidation.  

At present we may wait with our puts. One view is that as the Reliance and some other heavy stocks were sold for delivery with high volume, and this can not be repeated daily, today we may see a little bit recovery in the reliance stock along with market. But if markets break the lower level there is no support near the level.  One may understand that the markets earlier corrected and rose at this zone nifty 3600-2600 in one leg and so this time also markets may fall in one leg. Unless we see intra day bullishness one may wait in puts else if markets go up and trade weakly one may accumulate puts at 3700 level for further fall in shortest future.