Wednesday, March 31, 2010

A neutral day to end the financial year...

Markets witnessed a good correction yesterday to retest the levels of 5260 where it ended the march derivatives series. Today it is likely to be a neural day with a close around yesterday's close.

The high of the present bull run has not yet been tested and it is likely that the markets might rally upto 5370 in the near term before any strong correction sets in.

The 20 DMA on extrapolation will be around 5209 levels tomorrow and a retest of that will give strength for the additional bull leg going forward.

Resistance levels : 5268, 5283, 5296

Support levels : 5256, 5243, 5225

Happy Trading

Tuesday, March 30, 2010

Consolidation today after closing at year high...

Markets made a new year high close yesterday, closing above the 5300 mark after hitting the resistance level of 5330.

The rally can test the levels of 5370 which will offer a very strong resistance and markets likely to correct from that level.

There could be couple of more sessions where markets could be in range. As of now 5256 level acts as a strong support.

Resistance levels : 5311, 5336, 5370

Support levels : 5294, 5275, 5256

Happy Trading

Monday, March 29, 2010

Range bound market till the financial year end...

Nifty closed at previous year high close on friday at 5282 levels which was earlier made on 6 Jan 2010.

It now looks like the markets to fall back in to a tight range for the remaining three sessions in this financial year and a strong move to follow after that.

The 20 DMA will be at 5200 levels in a couple of days and will provide the support moving forward. A consolidation and a retest of 5200 levels would give the rally added strength and any upmove before that would be vulnerable for a strong correction at this stage.

The weekly charts indicate a strong resistance at 5370 levels and it is unlikely for the markets to move past that level in the near term.

The levels to watch out for the week. Resistance at 5311, 5370 and Support at 5187 and 5137

The levels for today

Resistance levels : 5294, 5311, 5336

Support levels : 5275, 5256, 5235

Happy Trading

Friday, March 26, 2010

A totally bull controlled series...Momentum to continue...

It was end of another derivative series yesterday and bulls totally dominated the whole series including the expiry and pattern-wise took it to the close mentioned previously.

Now that a new series has begun and bulls are in upperhand, will there be a momentum run breaking the year high. As of now it looks like another leg of consolidation is getting over and market has the potential to reach 5366 levels also in the short term. 5163 level should act as a strong support going forward.

Resistance levels : 5275, 5311, 5338

Support levels : 5245, 5224, 5203

Happy Trading

Thursday, March 25, 2010

Monthly Chart - March 2010


Can bulls give the final push for the expiry ?!

Throughout this series, it has been bulls completely dominating the markets and being the expiry of March derivative series, pattern-wise bulls are placed on strong ground and are likely to push markets for a higher close.

On the contrary, in the past sessions, there were heavy unwinding seen in 5300 put, as well as 5200 puts indicating some amount of weakness. If the markets are to be pushed higher, there might not be any reason for 5200 puts to unwind. The overall volume PCR and PCR indicates a neutral to a bullish move. The transaction on 5200 calls and puts far exceeded the amount seen for previous expiries and points to a close around 5206 levels.

Pattern-wise, bulls can take market to a close of around 5256 levels.

Overall, it is better to wait for the intraday data on the open interests around mid-day to strategise and trade the expiry rather than positioning around the open itself.
Will be updating the trading calls around noon today.

Resistance levels : 5235, 5256, 5275

Support levels : 5218, 5206, 5177

Happy Trading

Tuesday, March 23, 2010

Bulls to take control for the remaining two sessions into expiry...

Yesterday markets had a strong gap down and then bulls tried to push the markets beyond 5250 levels which acted as a strong resistance multiple times and bears took over and closed the markets near another key level of 5206.

The overall undercurrent is bullish and it could be the the turn of bulls to take control in the remaining two sessions for the expiry including today.

The options data is not favouring bulls or bears at this juncture and the volume PCR is remaining neutral. Overall 5200 call and put saw heavy transaction yesterday and 5300 puts saw unwinding.

Resistance levels : 5219, 5250, 5275

Support levels : 5189, 5175, 5163

Happy Trading

Monday, March 22, 2010

Markets to correct, but bulls to control this expiry...

Markets on friday reached and closed at a new high for the series. This week being the derivative expiry week, would see markets back under the control of bulls, though today markets could open gap down and test sub 5200 levels.

Throughout the series bulls have dominated completely and are likely to take upperhand on any correction and push markets back into their territory.

The levels to watch out for the week are - resistance levels 5275, 5335, 5365 and support levels 5196, 5134, 5085

The key levels for today remain the same.

Resistance levels : 5275, 5307, 5335

Support levels : 5239, 5224, 5175

Happy Trading

Friday, March 19, 2010

Bulls positioned strong...A move to test higher levels ...

Finally bulls were able to break the 5250 barrier also and also almost closed near that level by another powerful move towards the end from the
day's low yesterday.

Bulls seem to be positioned strong enough to retest the year's high level of 5311 and also break it in the coming days. The strong consolidation has strengthened bulls stance.

The options data is also suggesting an upmove and yesterday the open interest PCR has reached more than 2 indicating strong bullishness. Also the volatility is still at its multiple year lows suggesting further expansion and a strong one sided move.

Resistance levels : 5275, 5307, 5335

Support levels : 5239, 5224, 5175

Happy Trading

Thursday, March 18, 2010

Wednesday, March 17, 2010

Much expected breakout after a long consolidation ...

Markets were dominated by bulls yesterday and the much expected breakout to reach the levels of 5175 and 5206 happened yesterday.

The options data were pointing to the fact that the build up in calls were less when compared to the puts. The volatility at historic lows triggered the move for the breakout, only that it happened after a prolonged consolidation.

Now the question is how powerful this breakout is and what could be the immediate target? Since yesterday was the first day of the strong up move, further momentum is expected today and the levels of 5250, 5275 could also be reached. As of now the indications of the correction are still not in place and this looks like the initial move to kick start the momentum.

Resistance levels : 5220, 5250, 5275

Support levels : 5175, 5150, 5123

Happy Trading

Tuesday, March 16, 2010

Lowest historical volatility...Markets refusing to move out of range ?!

Yesterday also markets were confined between the week range of 5100 and 5150 levels and the historical volatility has again dropped to two year lows.

In this situation, the general expectation is that the markets will move very strongly in any one direction and the more the consolidation, the more severe will be the one sided move. It is also likely that the one sided move would be triggered for this expiry itself.

There are indications from the options data of a possibly strong up move as the near strike calls unwind and more of the near strike puts add open interest.

Resistance levels : 5150, 5175, 5206

Support levels : 5123, 5112, 5085

Happy Trading

Monday, March 15, 2010

An action packed week after a very tight consolidation ...

Last week saw markets consolidate in a very tight range, almost between 5100 and 5150 levels.

The historical volatility has again dipped to two year lows and markets have come to a point where there has to be a strong move in any one direction in this week.

Given the fact that 5000 put has the highest open interest and is at 1.2 crores and if the puts have been written earlier, there is less likely chance of markets to see a huge correction at this stage. On the other hand in the past session, there has been increase in the open interest of 5100, 5200 as well as 5300 calls and looking at all indicators, it could well be a case of accumulation by strong hands and markets likely to see higher levels also in this week.

A strong bull trap is seen around 5150 levels in the intraday charts on friday and going forward any move to nullify this, i.e a move beyond 5150 levels would favour bulls to a good extent and markets can move on to test 5175, 5206 levels immediately.

The levels to watchout for the week - Resistance levels : 5206, 5245, 5311 and
Support levels : 5092, 5038, 5011.

The intraday levels for today are

Resistance levels : 5150, 5175, 5206

Support levels : 5130, 5112, 5085

Happy Trading

Friday, March 12, 2010

Strong up move towards the end...Nifty to see higher levels...

The last half an hour in yesterday's session saw bulls charging and breaking again the key resistance of 5150. Though the expected move till 5175, 5206 did not happen yesterday, it is more likely that markets will open on a strong note and likely to reach the levels early in the morning session today.

There was unwinding seen in 5100, 5200 calls and 5000 put has an open interest of over 1.2 crores with 20 lakhs being added yesterday and FIIs have also bought Nifty futures around 1000 crores.

All this points to a strong bullish move at this stage and the next thing to watch out for is the heavy unwinding in 5000 puts at higher levels which could then signify that the markets have reached an intermediate peak. As of now 5206 is a crucial level, though for the sort of bullishness that all indicators have shown, this seems to be a very easy target to be broken on the upside.

Resistance levels : 5150, 5175, 5206

Support levels : 5130, 5112, 5085

Happy Trading

Thursday, March 11, 2010

An upmove today till 5175 - 5206 levels ...

The consolidation has strengthened enough for a strong up move to follow and it is highly likely that Nifty will make an attempt to scale 5175 which could act as a minor resistance and on breaking that would be able to touch 5206 levels.

Yesterday almost saw the mirror image of the previous day's pattern. For most of the day markets were trading higher than the previous close.

Looking at the PCR data, the volume PCR is at 1.39 and this is a strong indication of a strong rally. 5000 puts have crossed one crore in open interest and as on now the indications are that the puts have been written.

All this points to the fact that Nifty can run up to 5175, 5206 levels most likely today itself and 5206 could act as a strong resistance for markets to break and reach further high.

Resistance levels : 5150, 5175, 5206

Support levels : 5085, 5050, 5030

Happy Trading

Wednesday, March 10, 2010

Consolidation strengthening...Bulls to charge further anytime soon...

Another attempt to scale the first resistance level of 5130 levels early in yesterday's trade was again nullified and markets hovered around the tight range of 5100 - 5125 for the entire session.

The consolidation for the past few days has been strengthening and the strong bullish undercurrent with a momentum move is likely to kick in soon.

There might be a retracement till 5050-5030 levels also momentarily before bulls start to charge and take control again.

Resistance levels : 5117, 5130, 5150

Support levels : 5085, 5050, 5030

Happy Trading

Tuesday, March 9, 2010

Consolidation before another bullish breakout ...

The gap up of yesterday again placed bulls in a very strong position. Though markets faced stiff resistance around the key level of 5150, the amount of retracement from that level is less and bulls still have a strong upperhand going forward.

Markets might also consolidate between 5050 and 5150 levels before bulls charge and push markets to higher levels. Any break of 5150 would immediately push markets to test 5186 levels.

The historic volatility is at year low and the implied volatility is also ruling low and this signifies a strong move in any one direction going forward and as of now a bullish breakout is expected if this consolidation strengthens.

Resistance levels : 5130, 5150, 5186

Support levels : 5105, 5085, 5050

Happy Trading

Monday, March 8, 2010

Bulls positioned strong...A move till 5186 triggering short squeeze...

On friday, Nifty took strong support at the first mentioned level of 5070 and closed just its previous day's close.

Again to reiterate the point of a strong bullish move ahead, the short covering has not happened and retails have not yet participated fully in this rally and are waiting on the sidelines for markets to correct to enter and have been selling at this juncture.

5100 call added around 13 lakhs in open interest and a gap up will suggest that there had been strong buying in that when markets dropped below 5100 levels sharply on friday.

The weekly resistance levels are 5150, 5186 and 5254 and the support levels are 5050, 5012, 4959. Market is not likely to fall below 5050 without triggering a powerful short squeeze at this juncture.

The near term strong resistance is seen around 5186 and is likely that bulls could push markets to that level.

The levels to watch out for the day

Resistance levels : 5105, 5130, 5150

Support levels : 5070, 5050, 5032

Happy Trading

Friday, March 5, 2010

Bulls ready to charge again after consolidation yesterday ...

Markets consolidated yesterday taking key support at 5050 level and now the expectation is that bulls will be back to push markets further higher.

The short covering has not happened and retails have not yet participated fully in this rally and are waiting on the sidelines for markets to correct to enter and have been selling at this juncture.

The options data is also pointing to a bullish move and there has been huge writing seen in 5000 put. The volatility of the call options is on par with the historic volatility and much lower than the put options which is also pointing to bullishness.

Resistance levels : 5105, 5130, 5150

Support levels : 5070, 5050, 5032

Happy Trading

Thursday, March 4, 2010

Markets to consolidate before bulls can take over again ?!

Yesterday's pattern was almost a repeat of the previous day's pattern and bulls took control right from the beginning. Nifty broke all key resistances including 5085 and closed strong above that level.

Though market is getting into the overbought region, options data is indicating further upmove from this juncture.

If markets consolidates around the level of 5050 for a while, then the next leg of upmove could be intense and momentum is also likely to kick in at that stage.

Resistance levels : 5105, 5126, 5145

Support levels : 5070, 5056, 5032

Happy Trading

Wednesday, March 3, 2010

Bulls conquered 5000 fort...To push markets higher...

Yesterday right from the start markets were under the control of bulls and the initial hiccup to cross the 5000 mark with multiple attempts were broken towards the end.

There is a powerful bear trap at 4969 levels and going forward, that will act as a very strong support point.

Markets have also pierced the Bollinger upper band and the implied volatility of call options is ruling less than the historical volatility and is also much less when compared to the put options.

Given all this factor, there might be another strong rally in the short term with volatility expansion.

Resistance levels : 5036, 5050, 5085

Support levels : 4996, 4983, 4969

Happy Trading

Tuesday, March 2, 2010

Key resistance broken, but not sustained. Bulls still having upperhand ...

On the budget day, bulls were able to push the markets beyond all the immediate resistance level of 4950 and 4985, but failed to sustain to those levels and closed below 4930.

Though the pull back towards the end of the session is significant, equally significant is the upmove that started in the mid session and markets have not come down to retest the level of 4900 and this signifies bulls are having the upperhand right now.
It is likely that bulls should be able to push the markets to test the 5000 mark and also close the markets above the crucial level of 4950.

For the week, if bulls succeed in closing the markets above 4950 mark, then we can see rallies till 5100 levels and a round of consolidation around 5050 levels.

For the week 4840, 4823 should act as a strong support and a break and close below that level would bring back bearishness.

The key levels to watch out for the day

Resistance levels : 4956, 4985, 5008

Support levels : 4912, 4896, 4876

Happy Trading