Wednesday, June 30, 2010

Bears to move the market to test key support levels

Bears took complete control yesterday and from the key level of 5333 brought markets down below the earlier trap levels of 5285. This is indicating a consolidation and a move to test further support levels of 5191 mentioned in the weekly post.

Options data saw major writing in both 5300, 5400 calls of 13 lakhs each and there was unwinding seen in 5300 puts. This points to a bearish move immediately.

How to trade?

Overall markets could bounce back from the key support level of 5191 and is unlikely to fall below 5133 levels which should act as a strong support. Shorts can be initiated with a target of 5191 at open and if further correction happens towards 5150 levels, longs can be initiated

Resistance levels : 5277, 5292, 5310

Support levels : 5233, 5191, 5150

-Happy Trading

Tuesday, June 29, 2010

Ceiling of 5333 reached in a day...What next ?

On the first day of the week, markets had a gap up and reached the ceiling of 5333 levels mentioned in the weekly post. There is also a key bear trap seen at 5285 levels.

Options data saw relatively higher accumulation both in 5200 puts and 5300 puts with a PCR of 1.29 and pattern-wise, on the charts we see a bullish engulfing pattern. All these factors favour bulls at this stage, though the up move could come after a week's consolidation before markets could reach the monthly target of 5462 levels.

How to trade?

Market is already at the upper ceiling and though factors favour bulls at this stage, it is better to wait and watch for a few sessions before initiating any trade.

Resistance levels : 5364, 5385

Support levels : 5302, 5285

-Happy Trading

Monday, June 28, 2010

Bears moved the market on the first day of July series

The first day of the July series saw bears pushing markets down below 5300 levels.

It now looks like markets would swing between the key levels of 5191 and 5333 for a while before making the next move.

Options data saw quite heavy accumulation in 5200 puts and there could be momentary dip below 5200 levels for options writers to sell more of 5200 puts before markets could bounce back above 5300 levels.

How to trade?

Since markets likely to swing between the support and resistance levels, trade to buy at each support level and a sell at resistance level with stops being a move beyond the last resistance and support.

Resistance levels : 5302, 5333, 5369

Support levels : 5245, 5220, 5191

-Happy Trading

Weekly Update: A neutral week with a swing between 5191 and 5333...

What the markets did last week ?

Last week markets closed where it had started inspite of testing higher levels of 5367. It was the expiry week for the june series and markets ended close to 5300 levels. Pattern-wise, it has formed a grave stone doji pattern and markets closed at 5269 for the week.

What does the options data indicate ?

It might be too early to start reading the options data, but both the put and call options are ruling at a volatility very close to the historical volatility indicating a volatility expansion move likely to happen within the month. Overall there are still lot of puts in the system, which should provide cushion on any correction and markets likely to continue its upward journey in the month towards 5462.

What can be expected this week ?
The grave-stone doji pattern cannot be read in isolation and requires a confirmation on the trend.
This week could see markets swinging from 5191 and 5333 and at present 5191 levels should act as a strong support and it is unlikely for markets to fall beyond that and even if it does a sharp bounce is not ruled out.

How to trade for the week?

This week it is better to play the range with a long around 5191 levels and a short on levels of 5333 as it might take a while for markets to decide on a strong short term trend.

Weekly resistance levels : 5302, 5333, 5369

Weekly support levels : 5245, 5191, 5150

-Happy Trading

Friday, June 25, 2010

A neutral expiry day and beginning of new series...

The end of june series came on a neutral note and bulls were able to give the final push to move markets back above 5300 levels and close it above that.

New series has begun and accumulation is already seen in 5200 puts as well as 5500 calls setting the range initially.

Pattern-wise, a move till 5462 is on the cards in the intermediate term and that depends on Nifty holding 5200 levels. The key levels remain the same.

How to trade?

The might be consolidation around between 5268 and 5365 levels and it is better to wait for a while for a trend to emerge before initiating any trade

Resistance levels : 5333, 5354, 5365

Support levels : 5302, 5285, 5268

-Happy Trading

Thursday, June 24, 2010

Monthly Chart - June 2010


Last day of June series. Can bulls give the final push ?

Nifty hovered around 5300 levels yesterday with 5333 acting as the resistance level and closed the day on a neutral basis at 5323.

Options data saw unwinding towards the end of the session, both in 5300 calls and 5300 puts and both registering a huge turnover again for the third day of 10000 crores. Since unwinding was seen in 5200 calls as well as 5400 puts, the most likely expiry close for the june series is around 5302 levels and if bulls be able to give the final push in the later half of the session then Nifty might move on to 5354 levels.

How to trade?
A close watch on 5300 call and 5300 put open interest is required and if the accumulation is heavy in 5300 puts, then Nifty can go for a higher close of around 5354 levels. So any break below 5300 level is a buy point for the day. Depending on how it spans out, option trades will be posted separately. Watch out

Resistance levels : 5333, 5354, 5365

Support levels : 5302, 5285, 5268

-Happy Trading

Wednesday, June 23, 2010

Nifty to swing either side with 5300 as the pivot ...

The strong correction happened towards the end of the session yesterday though there were no attempts made to reach new highs for the series. Nifty managed to close above 5300 levels.

Looking at the options data, 5300 calls and 5300 puts registered a turnover of around 10,ooo crores and there were unwinding seen in 5200 calls, but not much of accumulation in 5400 puts.

How to trade?

All the option data points to a neutral move in Nifty with 5300 level as the pivot and a swing of 30 points either side and it would be better to initiate shorts around 5333 and longs around 5268 levels with 5302 as the target for either of the trade.

Resistance levels : 5320, 5333, 5350

Support levels : 5302, 5285, 5268

-Happy Trading

Tuesday, June 22, 2010

A strong correction towards the end of the session today ...

Right from the beginning of the session yesterday, bulls took complete control and pushed markets beyond the immediate resistance of 5331 levels which was another target for longs.

Options saw hectic activity with the turnover in 5400 call exceeding 10000 crores and 5300 puts around the same with more than 50% increase in OI. There was unwinding seen in 5300 call and overall the data is pointing to an expiry of above 5300 levels for thursday.

How to trade ?

Today there might be an attempt to scale new highs and a strong correction towards the end of the session. It is better to initiate shorts on new highs and on reaching 5406 levels with a target of 5320.

Resistance levels : 5366, 5385, 5406

Support levels : 5331, 5320, 5302

-Happy Trading

Monday, June 21, 2010

Volatile session ahead as we get into expiry week

Markets reached a peak of 5302 levels, a key resistance level on friday before closing in red after seven consecutive greens.

Options data saw unwinding in all near strike calls and accumulation in puts, pointing to bullishness, but the accumulation seen in 5300 calls could be a deterrent for the day and markets can be pulled back into range on a move towards 5331 levels.

How to trade?

Can accumulate Nifty on every dip for a target of 5331 levels. If markets gaps up to 5331, it is better to wait and watch before initiating any new trade.

Resistance levels : 5285, 5302, 5331

Support levels : 5245, 5203, 5170

-Happy Trading