Monday, July 26, 2010

Weekly Update: Entering the expiry zone...Bulls to take control after an initial bearish move.


What the markets did last week ?


Last week saw markets reaching the monthly target level of 5462 and also closed strong at 5449 levels, up 1% for the week.

What does the options data indicate ?

Options data saw heavy accumulation in 5500 calls and towards the end of the week the open interest surged in 5300 as well as 5400 puts. Slight unwinding was seen in 5400 calls towards the end. Though this points to bullishness, the open interest in 5500 calls is the highest and so that would act as a very strong ceiling for the week.

What can be expected this week ?

Markets could stay in a range of 5334 to 5507 levels. A move above 5507 levels is not foreseen as of now and markets likely to remain below that for the expiry this thursday.

How to trade for the week?

Markets is getting over stretched at levels of 5485 and above and shorts can be initiated at higher levels for a target of 5406. Also since bulls are likely to give the final push, any move to test range low of 5334 levels longs can be initiated.

Weekly resistance levels : 5462, 5485, 5507

Weekly support levels : 5442, 5406, 5334


-Happy Trading


-Happy Trading

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