Thursday, May 20, 2010

Range bound for another two days before a strong bounce next week


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.

Resistance levels : 4939, 4951, 4986

Support levels : 4902, 4885, 4857


-Happy Trading

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