Wednesday, September 30, 2009

Another close above 5000 levels..Should wait and watch

Markets yesterday nullified the bull trap made in the previous session and opened up for another bullish move with a strong close above 5000 levels.

The volumes are remaining low and it certainly looks like a wait and watch scenario before making the next move as there are no clear signs of a strong move either side.

Resistance levels : 5020, 5036

Support levels : 4999, 4979, 4947

Happy Trading

Tuesday, September 29, 2009

Consolidation and a range bound market in this short week ?

On friday, the first day of the october series, there were clear moves in market indicating indecisiveness on both the bullish and bearish fronts.
Looking at the intraday charts, there seems to be a strong bull trap at 4979 levels and a bear trap at the day's low of 4934 levels.

Though at this point it might be too early to call for the next trend and there are initial signs of weakness setting in for a bearish move, there might be some more consolidation and an increase in intraday volatility going forward and markets to remain range bound in this short trading week of three sessions.

Resistance levels : 4979, 4999, 5020

Support levels : 4947, 4927, 4918

Happy Trading

Updating blog...Please visit in another 10 mts..

Happy Trading

Friday, September 25, 2009

End of another series and beginning of new one. What to expect ?!

Another remarkable series came to an end yesterday almost closing near 5000 mark. Finally it was victory for both the expiry pattern and also the PCR as mentioned in the opinion yesterday.

The pattern was suggesting a bullish move and PCR was suggesting a sub-5000 close and finally both proved to be correct.

September series totally went in favour of put writers and at one point the PCR anamoly went as high as 1.77 and it did prove that put buyers were the suppliers for the whole series.

Now that a new series has started and we are entering the new territory with more bears in pain and fresh bulls waiting to charge, at this point in time it points more to a range bound market with 4800 levels offering support.

Resistance levels : 4999, 5030, 5041

Support levels : 4950, 4939, 4918

Happy Trading

Thursday, September 24, 2009

Monthly Chart - September 2009


5000+ close for Sep series. Will this be a reality ?!

Yesterday markets made the expected bearish move and now it looks like after setting the bearish tone one day before expiry, all heads start to look downwards.

A discount of around 6 pts and SGX at 4927 all point to the milestone of 5000+ for september series expiry a distant target, but then this might also be the final bear trap for this series and there is a good potential for Nifty to close around 5000 levels and as of now 5020 also seems to be a possibility.

The glitch is that the OI in 5000 puts has decreased by more than 36% yesterday and the OI in 5000 call has increased by 11%, suggesting even a sub-5000 expiry. It is a fight between the bullish expiry pattern theory and PCR right now and I favour a bullish close today.

Resistance levels : 4972, 4999, 5020

Support levels : 4950, 4939, 4918

Happy Trading

Wednesday, September 23, 2009

A bearish move today before bulls take it higher tomorrow ?!

Nifty again had a great up move yesterday and closed above 5000 levels.

Today there might be some consolidation or even a bearish move before bulls charge for tomorrow.

Right from 4500, all the puts till 5000 strike were written during this series and it now looks highly likely that even the 5000 puts could expire worthless.

There could be a move below 5000 levels today and even a close below that, but bulls could regain control and push it to above 5000 expiry tomorrow.

Resistance levels : 5030, 5041

Support levels : 4999, 4972, 4950

Happy Trading

Tuesday, September 22, 2009

View intact..Bulls to charge finally after consolidation for this expiry

Markets did not make any significant move on friday and consolidated around 4972 levels.

The view remains the same for this expiry. We can see some consolidation today and tomorrow and there might even be a move below 4900 to write more of 4900 puts and make it worthless for this expiry.

The PCR ratio is at 1.65, favouring bulls and though there was enough writing in 5000 puts, it might be early to decide the expiry to be above 5000 levels.

Resistance levels : 4987, 4999

Support levels : 4950, 4939, 4918

Happy Trading

Friday, September 18, 2009

Consolidation now and a bullish close for the expiry next week ?!

Nifty tested 5000 levels yesterday and that almost completes the momentum leg that we have been looking for right from 4580 levels.

Though there is not much of a downside forseen for this expiry and it is highly likely that the expiry is going to be above 4900 levels, it is difficult to say at this stage whether it will be above 5000 levels also.

Since we have seen during the entire series, it is put sellers market, for another day or two nifty might consolidate and we can also see 5000 puts being written considerably. If that happens, there is a good probability that the expiry will be near 5000 levels, the final bull move to come on the expiry thursday.

The PCR today stands at 1.54, cooling off a bit, but then the largest accumulation seen in 4600 and lesser strike puts are all almost worthless even now and it is going to be the fight between 4900 puts and 5000 calls and Nifty could move in a tight range.

Resistance levels : 4972, 4987

Support levels : 4950, 4939, 4918

Happy Trading

Thursday, September 17, 2009

Nifty to attempt and scale 5000 peak !!

Yesterday markets saw more of the momentum run and it is highly likely to continue today by Nifty attempting to scale the 5000 peak

The intraday pattern also looks very powerful for the past two days as the amount of retracement shown is very minimal.

Having seen this, we are getting into a territory where the last bear might turn a bull and would want to ride the momentum wave and so a correction of 100-150 points is also due early next week. So it would be better to book out profits at this stage and wait for the correction for reentry.

The build up in call seems to be still very low and this month is proving to be a put sellers market rather than a call buyers market as the appreciation in most of the out of the money calls is still very low for the price move that we have seen.

Resistance levels : 4991, 5021

Support levels : 4939, 4918, 4890

Happy Trading

Wednesday, September 16, 2009

A new high and Momentum kicks in !!

Nifty had a wonderful run yesterday, making new highs for the series and for the year.

The fact that there was also a powerful 'W' bear trap at 4865 levels and a close almost at day high indicate that this market has to run up for a while with a gap up open today.

Another interesting fact is that the PCR is skewed too much and is at 1.77. There has been massive writing in 4800 puts as well as 4900 puts and what it really points at this stage is that the expiry could even be higher than 4900 levels.

There has not been too much of an activity in the call side and is expected to happen today if 4930 is broken. This momentum can now even push the markets to almost test 5000 levels.

It is better to fasten the seat belt and ride the momentum wave with a trailing stop at 4850.

Resistance levels : 4939, 4961, 4991

Support levels : 4890, 4865, 4832

Happy Trading

Tuesday, September 15, 2009

Nifty to see new high soon ?!

Yesterday markets consolidated again and the volume was the lowest in the past 15 days. Both FII and DII activities were subdued.

It looks like everyone is now looking for markets to take the first step, so that they can follow instead of making the first move at this stage. A cautious approach is what is being taken by most of the players.

Nifty, on the other hand is holding the 4780 fort tight and a retreacement to test 4756, 4735 levels is also not happening. A retest of those levels and a break again of 4780 levels will bring in the required momentum, but then only time erosion is happening.

The PCR still remains at 1.24, same as what we have seen yesterday, but we have seen put accumulation in 4800. 4900 call has shed open interest. This points to some amount of bullishness to kick in.

The view is still maintained the same. Nifty should be able to make a new high and also break 4900 levels soon as long as 4718 levels is not broken on the downside.

Resistance levels : 4832, 4865, 4890

Support levels : 4780, 4756, 4735

Happy Trading

Monday, September 14, 2009

A week full of green close with least pull back. What next ?!

Nifty succeeded in making new high thrice and also tested the upper band twice last week but didnt pierce it significantly.

On the otherside, markets tested the crucial support of 4780 and everytime bounced without breaking that level.

Given this scenario, market is certainly waiting to take a direction and possibly move on to test new highs, but then a retest of 4756 levels is also on the cards.

Since the put build up is still quite high, 24% more than the calls, there is no significant correction seen for this month. The build up in 4800 put is quite low compared to the other near ones and so the move to test 4756 or even 4735 migth also happen this week.

It is a buy at these support levels as long as 4718 is not broken on the downside.

Resistance levels : 4845, 4865, 4890

Support levels : 4805, 4756, 4735

Happy Trading

Friday, September 11, 2009

A retest of band high and a brand new high! Undercurrent still bullish !!

Yesterday markets had a very strong open and reached new highs and also could conquer 4865 levels.

Though towards the end there was a strong move to trap the late bulls and a significantly lower close from the day's high, the undercurrent seems to be still very much bullish for this series.

The PCR has increased to 1.38 and other options data indicate bullishness and this market can clearly make new highs from this level also.

As of now, the key levels remain the same and a move above 4865 again would bring in the required momemtum that we have been looking for.

Resistance levels : 4845, 4865, 4890, 4930

Support levels : 4805, 4765, 4735

Happy Trading

Thursday, September 10, 2009

A day to start enjoying the fruits of staying long, so long !!

It almost looks like, today is the day when everyone is going to see the power of momentum, that I have been reiterating for a few days in this column right from 4580 levels.

Infact, the consolidation for the last two days, has added more fuel to the momentum.

At the time of writing, SGX Nifty is trading above 4865, the most crucial level which is also our first target.

Now the question is all the bears have been totally trapped and today's move is going to be a great surprise for the shorts, how far bulls can take this forward?

In any case, it is likely that we would see a close which is very near to the day's high today.

Resistance levels : 4845, 4865, 4890, 4930

Support levels : 4805, 4765, 4735

Happy Trading

Wednesday, September 9, 2009

A move to shrug off weak bulls. Momentum still intact ?!

Nifty scaled new highs yesterday and towards the end of the session gave a down move to almost test the previous close level.

The rapid move would have frightened some of the bulls and since Nifty is staying completely on top of the previous close, the momentum is still very much intact. The late move could be to shrug off weak bulls.

Only on a move below 4718 now would impart some bearishness and there will be strong support for Nifty if it reaches 4735 levels.

This is the first time Nifty is also testing the Bollinger Upper band and the low has been tested thrice after the election move and the ususal put call anamoly that we have seen is still existing in the system. It looks like it can pierce and move up in the next couple of sessions.

Resistance levels : 4820, 4845, 4865

Support levels : 4765, 4735, 4718

Happy Trading

Tuesday, September 8, 2009

New high reached ! Momentum to kick in !!

It was a very easy day for the bulls yesterday and right from start took complete control with a gap up and finally closed at the year high and also breaking the last resistance level of 4786 and closing near that level.

Slowly the market is in a stage where bears are completely trapped and new bulls are now waiting to enter for the fear of missing out a rally to 5K levels.

Still calls are being sold cheap and the (Put Call Ratio) PCR is ruling at 1.2, Puts are costlier and also there are 20% more puts in the system. So it looks very remote that this market will crash in September. Since calls are being sold cheap even after the breakout, there is still huge potential to make new highs and that is when momentum will also kick in and send the market higher.

The key targets now are 4865, 4930 and the first one is likely to be reached in another two or three sessions. Further view is not very clear at this point and we will have to wait for the markets to make the next moves.

Resistance levels : 4807, 4834, 4865

Support levels : 4765, 4735, 4718

Happy Trading

Monday, September 7, 2009

Another leg of rally to scale new highs !!

Nifty made a very strong up move on friday and also maintained it till the end after the breakout.

Finally it looks like the pattern theory of 'W' neck retest and the move to correct the anamoly between the implied volatilities of puts and calls gave good result.

Given this scenario and the strong close on friday, Nifty should see a gap up to 4718 levels and then on a break of 4731 levels, will immediately go for a new high and a target of 4765 and 4786 levels.

Only on a move below 4580, this bullish stance needs to be reassessed.

Resistance levels : 4718, 4735, 4765, 4786

Support levels : 4650, 4618, 4580


Happy Trading

Friday, September 4, 2009

Consolidation phase...About to retest the 20 DMA and bounce ?!

The triple top resistance at 4650 levels of the previous session proved to be a strong level to break and Nifty made a few attempts again yesterday, but failed.

Overall, though it is slowly setting the bearish undertone, testing each support level silently, the strongest support level of the 20 DMA is flat and is ruling at 4557.

There might be a move to test that support level and market is likely to bounce back from that level, rather than to crack below that.

The view remains neutral and range bound as mentioned in earlier posts and Nifty to hover between 4650 and 4550 levels and only on a break and close of 4537 will impart bearishness.

The put implied volatility (IV) is ruling around 41% and the call IV is at 29%. So people are willing to pay a hefty premium for puts in anticipation of the fall and calls are being written much cheaper. A bounce to correct this anamoly after retesting the 20 DMA level might happen soon.

Resistance levels : 4610, 4636, 4650

Support levels : 4580, 4557, 4537

Happy Trading

Thursday, September 3, 2009

Another leg of rally to begin soon after consolidation ?!

Markets consolidated as written yesterday and also tested the crucial support level of 4580.

The close now is exactly at the neck of the 'W' pattern formed earlier and it is more likely that markets can give another rally sooner after consolidating around this level.

Having said this, the earlier view of extreme bearishness would set in only on a break and close below 4537 levels.

Currently 4650 is being marked as a stiff resistance and Nifty has formed a triple top in the intraday pattern. So a break of this level on the upside would immediately bring in the next rally which could see new highs. Till then markets could very much consolidate between 4550 and 4650 levels.

Resistance levels : 4636, 4650, 4696

Support levels : 4580, 4553, 4537

Happy Trading

Wednesday, September 2, 2009

Markets to stabilize and consolidate at these levels ?!

Nifty made another attempt in scaling new heights yesterday, but then succumbed to gravity to test the key support level of 4605.

It is likely to test 4580, 4557 levels, but not beyond that and also most likely to consolidate without a big sell off.

Any move that breaks 4537 levels from where this entire up move emerged, will impart extreme bearishness which is unlikely to happen.

Resistance levels : 4636, 4665, 4696

Support levels : 4580, 4557, 4537

Happy Trading

Tuesday, September 1, 2009

Significant correction seen. Markets to correct further before the next move ?!

Yesterday saw significant correction and engulfed the whole of the bull move made on friday and the preceeding two sessions. For the uptrend to continue, we are looking at a healthy correction and markets should correct till 4605, 4567 levels soon.

A break of 4718 levels in short term now will be bullish, but if that move happens without the retest of 4567 levels, then it could be dangerous and collapse heavily later under its own weight.

As of now again a clear trend is not getting established and it also looks like a consolidation between 4600 and 4700 levels.

4674 and 4696 should offer stiff resistance for the day and market is not expected to shoot up beyond 4696.

Resistance levels : 4674, 4696, 4718

Support levels : 4636, 4605, 4567

Happy Trading