The much expected short squeeze happened on Friday's session also and this reiterates the fact that bears are completely trapped for this expiry. I was discussing this with my friends and the question that was asked was,
1. Why are you so bullish from this level and why is it not possible for a reversal from this level.
My simple answer to this is that we have seen a high of around 2830 (NIFTY futures) in this month and even the worst bull is now sitting with a mere loss of 22 points. Just imagine the plight of the bears sitting at a loss of 250 odd points and hoping for a reversal.
So the question I ask back is, 'Why would bulls sitting at such a strong position give up and give way to bears to take control of this expiry when the worst bear has been trapped from 2525 levels?'
Also there are other evidence that points to vested interest in this expiry being at higher levels and it is evident from the fact, though NIFTY managed to complete the day with a doji, 8 out of 10 heavy weight index stocks are in the red. Using ONGC for the short squeeze, bulls have managed to place them back in a comfortable position and in the process have trapped much more bears, fresh ones which entered on friday, thinking that NIFTY is unable to cut across the ceiling of 2800 easily and so that denotes weakness.
May be just to let the bears think they have an upperhand, bulls didnt over extend the show on friday and my take is that the drama will unfold in this expiry week and can push NIFTY to our earlier target of 2900- 2950 levels... with 2868 being the immediate target.
This theory will prove wrong only if we see 2730 levels being touched and is broken down further to 2686 levels which according to me looks like a very, very remote possibility.
Chart courtesy: nseindia.com
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Happy Trading
www.tripleint.com
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