Is it time to panic?

If any body buying Puts or Calls of Nifty after 20^th November 08, and holding it must be suffering from time wise decay in the value. At this time writing out of money calls or puts can be beneficial but it requires higher margins. Nifty has been trading in the range 20^th nov. low 2503 and 8^th dec. high 2862. Since 20^th Nov in 12 trading session no significant increase or decrease in volume witnessed. A positional trader will have to wait for a decisive break out.

If we assume no break out soon, then the followings will be important levels for nifty to watch out.

2503, 2588, 2640, 2682, 2725, 2777, 2862.

Break out above 2862 can lead up to 3080 and break out below 2503 can crash up to 2280. For near future I do not hope for higher high above 3241.

For 10^th December 2008, we may see some initial panic and then a smart pull back. I expect the opening in red at around 2777 levels and panicking up to 2682 levels. If nifty manages to close above 2725, it will be a concern for the bears and a comfort for the bulls.

Pivot point support and resistance.

Support – 2712, 2640. Pivot – 2787. Resistance – 2859, 2934.