Friday, January 29, 2010

An expiry mostly controlled by bears. Further down-side seen ?!

It was an expiry almost controlled by bears and was exactly confined between the levels of 4932 and 4826 indicated in yesterday.

Though the close was higher at 4867, in the battle between 4900 calls and puts, it was decisively the bears that won the battle in the end.

The most crucial support level of 4807 was left untouched yesterday and that points to more weakness setting in, in the short term.

The 200 DMA on extrapolation will be at 4700 levels in another two weeks and markets could also remain within 4700 and 4950 levels in the short term.

Resistance levels : 4903, 4932, 4953

Support levels : 4848, 4825, 4807

Happy Trading

Thursday, January 28, 2010

Monthly Chart - January 2010


Bears to show their might for expiry also. A close around 4826 ?!

Bears have totally dominated this series in the last few sessions. In yesterday's intraday pattern, there has also been a strong bull trap at 4903 level.

It is unlikely that Nifty moves above 4903 levels in today's trade and even it it breaks that level, the strong ceiling is around 4932.

Markets will be controlled by bears towards the end of the day for this expiry and a close of 4826 is expected for the January series.

Resistance levels : 4856, 4903, 4932

Support levels : 4850, 4826, 4807

Happy Trading

Wednesday, January 27, 2010

A day completely below the lower band. Bears to take control ?!

On friday, Nifty was unable to move above the previous close and had stiff resistance at 5036 levels. Though the close was above 5000 levels, looking at the pattern the entire day's trade has been under the lower band.

This has imparted bearishness and it looks like bears will take a strong upperhand and can push Nifty to test further lows. A break of 4950 levels will be extremely bearish for the short term.

Resistance levels : 5020, 5036, 5052

Support levels : 4985, 4950, 4925

Happy Trading

Monday, January 25, 2010

Resting on the lower band and a crucial session to decide the short term trend ?!

Nifty tested further lows after breaking the lower band on friday and though it gained from its lows, it is still at a crucial level.

The volumes were heavy and any further break of 4985 levels would bring in more weakness.

There has been a strong resistance established at 5077 during intraday on friday. Any move above that level could push Nifty towards 5100.

As of now it is a wait and watch situation as market could turn eitherway from here.

Resistance levels : 5052, 5077, 5094

Support levels : 5011, 4985, 4950

Happy Trading

Friday, January 22, 2010

With a powerful bearish move, increase in volatility seen..What next?

Markets were totally under bear grip yesterday and the key support levels have been broken and also the close is well below the 20 DMA with an increase in volume.

Indicators are pointing to a short term weakness and markets might close for the day near the lower band at 5018, even if it tests further lows.

Resistance levels : 5115, 5150, 5167

Support levels : 5050, 5018, 4985

Happy Trading

Thursday, January 21, 2010

Back to test the 20 DMA...Getting ready for a bullish move ?!

Yesterday was another doji day and markets closed around the support level of 5225.

Also the key resistance and support levels of 5256 and 5201, mentioned yesterday were tested and it looks like market is back to test the 20 DMA around 5185 levels.

Indications are still pointing to a bullish move anytime and it is unlikely that markets go for a strong correction at this stage.

It might remain range bound again between 5160 and 5256 levels before going for the next bullish move.

Resistance levels : 5225, 5243, 5256

Support levels : 5201, 5185, 5160

Happy Trading

Wednesday, January 20, 2010

Option Trade - Volatility expansion with bullish view

Underlying: S&P CNX Nifty Index
Instrument: Option
Action: BUY
Expiry: Feb10
Option Type: Both call and put
Strike Price: 5400 call and 4900 put
Units: Buy 2 units of 5400 call  and 1 unit of 4900 put

Current Market Price: Rs. 66.50 for the call and Rs. 38.50 for the put. 
Total Investment : Rs. 8585
Target Price: Combined Premium reaches Rs. 245
Stop Loss:  Combined Premium reaches Rs. 95
Rationale: Volatility expansion with Bullish view

Analysis: -  
The market has been moving in a narrow range with the volatility remaining low for a long time.
The undercurrent is bullish and a momentum run is likely to happen anytime soon, the implied volatility of calls being much lower than that of puts.
To cash in on the above views, an additional call is added to the 5400 call and 4900 put strangle.

Happy Trading

Back to the strong support level. A bounce again from here ?!

The consolidation is heightening with volatility shrinking to year lows. Yesterday markets closed at  the crucial support level of 5225. This has been a key level as seen for the past few sessions and the earlier bounce also happened after a retest of this level.

The range is becoming narrower between 5225 and 5285. Though the undercurrent is bullish, bulls are unable to push the markets beyond 5285 and it seems like more consolidation is required to do that.

Resistance levels : 5256, 5282, 5310

Support levels : 5218, 5201, 5185

Happy Trading

Tuesday, January 19, 2010

Bulls took charge yesterday. Will there be another move today?!

Nifty gave a strong bounce yesterday after nearly testing 5225 levels and this was expected. A break of 5300 levels however again did not happen and after yesterday's move, the bulls are regaining strength.

Now that Nifty has established strong support at 5225 and also surpassed the resistance at 5270 levels, there is all the more chance of a break of 5300 levels and also test new year highs.

The volumes are still subdued. A momentum run with increasing volume is still due and is likely to be happen in the near term before markets lose steam.

Resistance levels : 5285, 5310, 5335

Support levels : 5258, 5225, 5201

Happy Trading

Monday, January 18, 2010

Consolidation...Chances of bulls charging more than bears taking control ?!

On friday and also the whole of last week, Nifty went back into consolidation mode. 

Pattern-wise, bulls still have the upperhand and a retest of 5225 levels should give a strong bounce for Nifty at this stage.

There has been a bull trap at 5268 levels and that should act as a resistance. A break above that level would push Nifty back to 5310 levels.

Resistance levels : 5268, 5279, 5310

Support levels : 5241, 5225, 5201

Happy Trading

Friday, January 15, 2010

Back to test range high. Bulls to take upperhand ?!

The uptrend which started towards the end of the session on 13th Jan 2010 is being held and yesterday throughout the upmove was maintained. Though the retracement did not happen till 5145 levels, the expected bounce happened.

The three day pattern is pointing to bullishness again. The volume PCR has gone up to 1.38 and this has gone in favour of the bulls.

The range is widening on the top. 5301 level will still offer strong resistance and any break can take Nifty to new highs of 5385 in the near term.

Resistance levels : 5282, 5301, 5335

Support levels : 5244, 5225, 5205

Happy Trading

Wednesday, January 13, 2010

Nifty trying to breakout of the tight range. A test of 5145 and a strong bounce ?!

Yesterday markets failed to sustain to 5225 levels and broke it towards the end. This has given bears a slight upperhand for the shorter term.

Now there is all the more chance of bears to push markets to 5145 levels in the near term and bulls are expected to charge from those levels. 

The volume PCR is back to 1.04, indicating almost equal activity happening in puts and calls. 

Resistance levels : 5225, 5250, 5268

Support levels : 5201, 5187, 5169

Happy Trading

Tuesday, January 12, 2010

Another flat day and consolidation continues? For how long is the question ??

Yesterday was another day of consolidation and in the end turned out to be a flat day considering the previous close.

I had written yesterday, a break of 5288 would push markets higher, but the break did not happen and 5287 became the hard ceiling for the day.

The historical volatility is very near to the year low and the expected breakout has not been happening for a while. The volume PCR at 0.95 though neutral has started to favour bears. Since the volatility is shrinking for quite sometime, markets should shrug off and go for a short term move either side. 5225 is a key level where the bear trap was made a few sessions earlier and that should provide a strong support.

Resistance levels : 5262, 5288, 5311

Support levels : 5238, 5225, 5201

Happy Trading

Monday, January 11, 2010

Hovering in the range near the upper band...Upside breakout soon ?!

Nifty corrected a bit on friday, but still the overall pattern suggests bullishness and this week could see the markets going for an upside breakout.

Volumes have been steady and Nifty is also hovering in a tight range very near to the upperband.  Any move above 5288 will push the markets to retest the levels of 5310 and can also push it to 5385 levels.

Resistance levels : 5255, 5285, 5311

Support levels : 5234, 5216, 5201

Happy Trading

Thursday, January 7, 2010

More the consolidation, heavier the breakout ?!

Nifty has been forming doji pattern for the past two days and is consolidating near the range high. The retracement has not been much in the two days and the bear trap made at 5225 levels couple of days back still holds good.

The key levels remain the same and there is a higher probability of Nifty to break the 5300 barrier again and go for a higher close soon.

The volumes have started to slowly increase and any breakout of 5300 levels at this stage will bring in the required momentum and a push towards 5380 levels.

Resistance levels : 5295, 5324, 5365

Support levels : 5270, 5248, 5225

Happy Trading

Wednesday, January 6, 2010

Range breakout and a strong up move for the day ?!

It was almost a repeat pattern yesterday where the markets opened stronger and sustained the up move throughout.

Given the scenario that the upperband is tested multiple times, there is a possibility of a very strong breakout on the upside and Nifty can even test 5385 levels in the very near term.

Yesterday's volumes were also the highest in a month pointing to a better possibility of an upside breakout.

Resistance levels : 5295, 5324, 5365

Support levels : 5270, 5248, 5225

Happy Trading

Tuesday, January 5, 2010

Momemtum kicking in and Nifty to scale new highs !!

Nifty gave an upmove yesterday right from the start and also closed higher. There has also been an intraday move to trap the bears around 5225 levels.

Given this scenario, the expected momentum move is likely to happen and push Nifty to 5295 levels and even beyond.

The overall historical volatility has been ruling very low and it is high time that Nifty can break out of the range high and go for a momemtum run.

Resistance levels : 5252, 5265, 5295

Support levels : 5225, 5202, 5185

Happy Trading

Monday, January 4, 2010

A new year and a new series...What to expect ?!

Finally december series came to an end and though it was a high close for the year, it could not break the upper band and move beyond that.

Now that a new series has begun on a new year, it looks like the momentum that was supposed to come towards the end of December is highly likely to be kicked off early this week and Nifty should move to test 5295 levels and beyond.

Resistance levels : 5217, 5246, 5265

Support levels : 5185, 5161, 5145

Happy Trading