Lock profit in NIFTY. Correction ahead.

On 3rd January NIFTY inched ahead as predicted yesterday based on the bullish anomaly spotted on the SMT chart and closed 12.75 points higher. Now we have a bearish anomaly between NIFTY and SMT (marked in the chart below). Moreover, the spread between spot and futures has narrowed down to only 4 points indicating weakness or correction ahead. The trading volume was also very thin creating doubt about the sustainability of today's up move.

We closed the bullish hedge near the end of the trading day by breaking even in both the futures and the Jan 8350 calls. No profit could be booked because the futures were traded at a discount near the close.

As per the anticipated weakness we shorted the market by selling futures and selling Jan 8150 puts.

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