What the markets did last week ?
Nifty was confined in a tight range on a weekly basis, opening the week at 5076 levels and breaking 5000 levels, testing 4961 levels and finally closed above 5100 levels exactly at the resistance level for the week of 5136. The week saw Nifty gain 1.36% and also a close above the weekly 20 period moving average of 5087.
What does the options data indicate ?
Options data indicate heavy accumulation in 5000, 4900 and 4800 puts and also in 5200 calls which point to the range of 4800 to 5200 levels for the week. Also the accumulation in 5100 puts when compared to 5200 calls is very less and suggest a down move in the initial part of the week.
What can be expected this week ?
Markets can hover in a larger range of 4800 to 5200 levels for the week and as of now there is no strong indication of any trend either side. Only on a break and close of any of the above levels would a strong trend emerge and it is likely that markets will be confined within the range for the week.
How to trade for the week?
The expectation is for markets to hover on a larger range and on reaching the ends markets is likely to fall back into range. Shorts are to be initiated on reaching the resistance levels and longs on reaching the support levels with the stop losses on shorts on markets crossing 5245 levels and on longs on a break below 4786 levels. Options calls will be posted separately during the week.
Weekly resistance levels : 5150, 5201, 5245
Weekly support levels : 5004, 4942, 4885, 4786
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