Monday, May 31, 2010
On friday markets yo-yo ed around 5050 levels and also closed higher above the 20 DMA level of 5051.
Pattern and option data is suggesting a range bound move around 5050 levels with a swing of 50 points either side for some more sessions before Nifty can make another move either direction.
Friday, May 28, 2010
Contrary to the view of bears pushing the markets to lower levels for expiry, the day was totally dominated by bulls and saw the close a shade above 5000 levels.
It is the beginning of a new series and looks like a bounce back till the level of 20 DMA levels, currently on extrapolation at 5050 levels, is on the cards and market is likely to move in a range around 5050 for sometime before the next major move.
Thursday, May 27, 2010
The bounce that we saw yesterday, pushed Nifty even beyond the key resistance level of 4884 and also bulls were able to make a close above 4900 levels.
This has established a fight between bulls and bears for 4900 level for the expiry and majority of the data and pattern point to the fact that overall bears still have the upper hand for the expiry and might push Nifty to a close around 4806 levels.
Options data saw huge unwinding in 5000, 4900 calls and accumulation in 4900 puts, which gives bullish indication, along with the PCR of 1.10. But overall the undercurrent is very much bearish and for most of the session market is likely to trade in a narrow range between 4885 and 4925 before bears take control after noon and push it near 4800 levels for an expiry of around 4806 levels.
Wednesday, May 26, 2010
Markets opened on a weak note yesterday and bears dominated throughout the day without any bounce and pushed Nifty to test sub-4800 levels.
The bounce beyond 4900 levels did not happen and it looks like bears have established an upperhand for the expiry.
There might be a bounce till 4850 levels and even a close around that level, but most likely bears will take control for the expiry tomorrow and push Nifty below 4800 levels. This is all the more possible if Nifty is unable to move past 4884 in today's trade. The option data saw accumulation in 4900 calls and 4800 calls as well yesterday which could be due to writing.
Tuesday, May 25, 2010
Markets had a strong opening yesterday and were able to move higher than the 200 DMA and also the crucial resistance of 5000. But then bears completely took control in the later half of the session and moved it back to where it closed the previous day.
Options data were suggesting an upside breakout throughout the day yesterday, but shorts were building up for every rise.
Today markets have opened in red and are hovering around 4860 levels, closer to the series low of 4842. The build up in 4900 calls and 4800 put is heavy and as of now a direction from this point is not yet clear as bulls and bears still fight it out for the expiry in another two days.
Overall there might still be a strong bounce towards 4950 levels any time in the day.
Monday, May 24, 2010
On friday, the markets dipped below 4900 levels to see a strong bounce thereafter.
The suggested buying of 5000 calls, when Nifty was at 4850 doubled by the end of the day on friday.
Looking at the options data, the build up is heavy in 5100 calls and above as well as 4800 puts. 4900 puts saw huge unwinding and Nifty might sway between 4900 and 5100 levels before settling above 5000 for the expiry. As of now there are not enough indications of Nifty breaking 5100 levels and moving higher though that also seems to be a possibility.
Friday, May 21, 2010
Yesterday markets were range bound, confined between 4900 and 4986 levels. The momentary dip below 4900 levels did not happen.
Markets have now opened gap down and is trading around 4850 levels. Options data indicate a bounce till 5000 levels before the expiry next week and it could be time to accumulate 5000 calls whenever market moves below 4850 levels.
Thursday, May 20, 2010
Bears were strong yesterday the moment markets opened below the key level of 5014 and pushed it to test 4950 levels and closed the markets well below the 200 DMA of 4986 levels.
It looks like markets will remain range bound for the rest of the week hovering between 4900 and 4986 levels with bulls and bears alternating each session. There can also be momentary dip below 4900 levels but is likely to bounce back into range.
The open interest in 4900, 5000 and 5100 calls increased significantly though overall the accumulation in 5000 calls is less compared to the near out of the money strikes and this points to some amount of bullishness to kick in next week.
Wednesday, May 19, 2010
Yesterday was a neutral day marked by Nifty testing the resistance of 5106 and falling back into range.
Accumulation was seen in near strike calls and unwinding in puts. A move to test 4950 levels in the short term is happening currently before Nifty can give another bounce back to 5100 levels for this series.
Tuesday, May 18, 2010
Bears pushed Nifty below 4981 levels and tested the 200 DMA after an year. Though the move was short lived and a strong bounce happened immediately, it is not yet time to take position immediately.
There might also be another move to test 4950 levels and a break of 5014 levels would immediately bring in bearishness.
The options data suggest a larger arbitrage move has been happening for quite some time with the open interest in near strike put and calls both increasing heavily. There will be heavy build up in 5000 calls before any down move for the day indicating selling in 5000 calls.
Monday, May 17, 2010
On friday, markets corrected significantly the moment the key support of 5150 was broken along with bull traps around the level of 5150 and 5128. The short term bearish trend was confirmed on a move below 5106 levels.
Looking at the options data, there were heavy selling seen in 5200 and 5100 calls and the open interest increase significantly towards the end of the session, indicating further downside move.
Also 4900 puts saw unwinding which also indicates further bearishness. Now that the initial range arbitrage is coming to an end, nifty might move well below its 200 DMA which is at 4981 on extrapolation, before giving another strong bounce towards the end of this series.
Friday, May 14, 2010
Yesterday markets made multiple attempts to cross the 5200 hurdle as well as to cross the 20 DMA resistance level at 5208, but was not able to do so.
The build up seen in the near strike puts and calls suggest a tight range, reducing the time premium in options before it can breakout in a direction during next week.
Only on a move above 5250, or below 5106 will start a new trend.
Thursday, May 13, 2010
Yesterday markets saw a powerful bounce the moment 5100 levels were broken and it looks like bulls are gaining control again.
Any move above 5180 would push markets to test 5250 levels which will act as a resistance and on a close above that, markets are headed to a new year high of above 5400 levels.
5000 puts saw a huge increase in open interest yesterday which mostly could have been due to writing indicating further bullishness.
Wednesday, May 12, 2010
After the strong up move in the previous session, yesterday markets corrected and closed near the second support level of 5128.
Any move below 5106 will indicate arbitrage play with wild swings. As and when the markets fall back into range the open interest in calls and puts increase near the range ends.
5106 will act as a crucial level and if 5086 is tested a strong bounce is expected from that level. Any move above 5211 would bring back strong short covering and will push markets to 5250 levels.
Tuesday, May 11, 2010
Yesterday markets opened gap up above the crucial level of 5050 and bulls were completely in control for the entire session taking markets to close above the resistance level of 5187, above which the short term trend is back to bullish.
The 20 DMA is at 5231 and before this downmove to break 5000 levels, there was a powerful trap point established at 5250 which if conquered by the bulls will push markets in no time test year highs of 5400 levels.
Only a move below 5106 would signify large arbitrage play which is less likely to happen. The options data indicates build up in 5100 puts to a large extent and there could be a strong up move to test 5250 levels soon.
Monday, May 10, 2010
A gap down below 5050 levels saw bears taking upperhand and pushing Nifty below 5000 levels for the first time in two months. The weakness however could not push Nifty to test the 200 DMA levels of 4956 and bulls also were not able to push Nifty beyond the crucial level of 5050.
Options saw huge accumulation in 4700, 4800 puts and also a substantial increase in 4900 puts and 5200 calls. The accumulation seen in 4900 puts of the order of 30 lakh contracts two days before is still intact and unwinding has not happened so far. The volume PCR of close to 1 is also not indicating a strong directional move yet.
It looks like markets are back to gap up/down days with end of the day bulls and bears caught on the wrong foot each time. The trend as of now is still unclear and it is better to wait and watch for a few more sessions before concluding on the short term trend.
Friday, May 7, 2010
Yesterday bears pushed markets below the crucial support of 5050 level which indicated massive weakness and sell off based on the previous day's pattern. Nifty however managed to give a strong bounce from the day's low which seems to be a move to throw away weak bears.
4900 puts did not see much action the whole day yesterday and saw little bit of unwinding after the massive accumulation of 30 lakh contracts the day before.
Any further break of 5050 would lead to massive selloff and Nifty can move on to test 4932 levels before settling at its 200 DMA of 4956.
Thursday, May 6, 2010
Yesterday markets were able to rise strongly from the crucial support level of 5050 and in the process, there were also powerful bear traps seen around 5067 and 5098 levels. Looking at the intraday chart and the overall pattern it is likely that markets can stage a strong rally from this level.
Given the fact that 5067 is the powerful trap point any move below that today will bring in extreme bearishness.
4900 puts saw an accumulation of around 30 Lakh contracts which is a very huge number for a single day and 5100 call also saw an increase in OI of about 15 lakhs. Any move below 5050 would then point to the fact that markets are moving down to test 4900 level in the near term. Similarly a move beyond 5187 would bring back the bullishness and will push Nifty to 5250 levels. It might be a crucial trading session to decide on the shorter term trend.
Wednesday, May 5, 2010
Bears completely took control of the markets after the powerful bull trap at 5250 levels the day before and also pushed Nifty beyond the crucial support level of 5181.
Today it has already tested the last support of 5050 levels and it is expected that Nifty will give a strong bounce from this level going forward in the short term.
Tuesday, May 4, 2010
Bears took control over the markets after Nifty made a failed attempt to crossover the 20 DMA. Also a powerful bull trap is seen around 5250 levels which will act as a strong ceiling going forward.
The lower band is at another crucial support of 5184 level and it is possible for Nifty to test the lower band today and then fall back into range.
Monday, May 3, 2010
On friday, the beginning of new series, bulls pushed markets further to retest the 20 DMA. It looks like markets will remain rangebound between 5200 and 5300 levels for some more time, before the next big move begins and as of now there might be another bull run to test 5400 levels and beyond in this series.
The key levels for today