A bear controlled expiry..New series and what to expect ?!

Bears totally dominated october expiry in the last two weeks without giving any chance for the bulls. Even on the expiry day, bears proved their might in the last one hour of trade.

The main key was the break of 4900 levels and unwinding of the 4900 puts earlier which prompted for the bearish close for the expiry.

Now that a new series has begun, it is likely that markets will give a bounce to 4950 levels in the short term and then might again get into the bearish mode. This is the indication as of now.

It is not yet time to read the PCRs, but pattern suggests a move till 4950 which could act as a hard resistance level to break for the series.

Resistance levels : 4785, 4818, 4845

Support levels : 4734, 4705

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Monthly Chart - October 2009

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Bears to control the expiry also... 4734 expiry a possibility ?!

Bears have been totally dominating the markets in the last few days and now the expiry day has arrived.

Having had complete control till now, bears are less likely to give up and show their might for the expiry also.

Yesterday's session saw heightened volatility, but the expectation today is that bears would take complete control right from the beginning and would push Nifty to test lower levels of 4750 and even beyond. A test of 4705 levels is also not ruled out.

The PCR for the series has declined to 0.93, completely in favour of bears. There are only very few expiry instances where the range has been more than 100 points and today there is a high possibility of more than a 100 points down intraday and a possible expiry at 4734 levels.

Resistance levels : 4845, 4868, 4896

Support levels : 4785, 4734, 4705

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Bears proved their strength..4900 broken decisively..What next for expiry ?!

Bears completely conquered the 4900 fort and also showed immense strength to break it and close below that level.

The close is also below the lower bollinger band and there has been a significant increase in volume.

On the intraday charts there are multiple instances of bull traps at each key levels, 4955 and also just above 4900.

For this series, the OI in 4900 puts were ruling very high at some stage and now that it has been decisively broken, as written before, it is a proof that the puts have moved from weak hands to strong hands. Even an expiry above 4900 looks remote at this stage.

The overall PCR has come down to 1.02, though neutral, but the way it has decreased as the market came down favours bears.

Resistance levels : 4868, 4896

Support levels : 4808, 4785

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Bears to push Nifty to 4900 levels...and then a consolidation ?!

It was another day where bears took total control and pushed Nifty from the day's high to close almost near the day's low.

It looks like bears can further push Nifty to test 4900 levels as written yesterday and there might then be consolidation at that level also.

Yesterday again there was a strong bull trap seen at 5010 levels reiterating bears strength.

The PCR stands at the same level of 1.12 and that is the main reason why there could be more of a consolidation around 4900 levels and markets might not yet crack down.

Resistance levels : 5010, 5032, 5045

Support levels : 4945, 4931, 4916

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Bears showing strength...Will 4900 be tested and broken before expiry ?!

In the last week, each day had a move to trap the bulls at some higher level and then bears took total control to close almost near the day's low.

This clearly indicates that majority of the bulls are trapped at each level and friday's intraday pattern also suggest that a strong bull trap is seen around 5050 levels which should act as a strong ceiling for this series.

Looking at the PCR, it is now at 1.12, though not favouring bears much, but the fact remains that the PCR has been decreasing when the markets were under bears control last week. The OI in 4900 put which reached more than 70 Lakhs has now cooled off a bit to 53 Lakhs which could also mean that the strong hands which wrote the puts earlier could have covered and now there is a good chance of this market to retest 4900 levels before expiry.

Resistance levels : 5018, 5032, 5045

Support levels : 4985, 4968, 4945

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There will be no update for 23 Oct 2009. Sorry for the inconvenience caused.

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5050 levels reached...50:50 chance begins to favour bears?!

Yesterday I had written that there will be a retest of 5050 levels and then it will be a 50:50 chance for the bulls and bears.

Looking at the intraday pattern of the previous session where there was a strong bull trap at 5150 levels and also looking at yesterday's pattern, where there is a bull trap at 5100 levels, it looks like bears are slowly taking the upperhand.

The PCR is at 1.23, it has decreased from 1.33 levels of yesterday and more of the near strike puts has decreased OI and the same has increased for calls. This also indicates some sort of bearishness.

It is a crucial session today and if the PCR further decreases at the end of the day and the day being bearish would signify a bearish move in the short term. Also the 20 DMA support is around 5040 levels and we should watch if Nifty closes below that level for the day.

Resistance levels : 5079, 5092

Support levels : 5045, 5026

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A retest of 5050 levels and then a 50:50 chance for bulls and bears ?!

The intraday pattern of yesterday totally favours bears, a new high being tested and then a strong pull back and to add to that a very powerful bull trap at 5150 levels.

It now looks like Nifty might fall again to test the 20 DMA around 5050 levels.

The PCR ratio is at 1.33 which is favorable for the bulls and so a strong correction seems to be ruled out at this stage. That is why it looks like a 50:50 chance for the bulls and bears when 5050 level is breached.

Resistance levels : 5131, 5150, 5169

Support levels : 5109, 5086, 5068, 5054

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Will 5200 level be the ultimate upper ceiling for the near term ??

Nifty is traversing along the bollinger upper band for the past three sessions and it looks like it is getting over heated in the intermediate term.

There will be strong resistance once 5200 level is breached and that will act as the upper ceiling for the intermediate term.

The option pain has slowly moved from 5000 levels to 5100 levels and there is a good possibility of Nifty retesting 5100 levels in a day or so.

The PCR ratio is still in favour of bulls and is likely to change when Nifty reaches 5200 levels. 4900 put has an OI of 70 lakhs and that is going to act as a strong support for this month.

Overall it is likely that Nifty will make another attempt to scale new high and is likely to fall from the levels of 5200.

Resistance levels : 5156, 5176, 5204

Support levels : 5126, 5109, 5086

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A strong comeback after retesting 20 DMA for the bulls.!!

It was a strong comeback for the bulls after retesting the 20 DMA.

Both bulls and bears were equally poised for the last session and it now looks like bulls have won again and likely to push Nifty to new year highs before falling into the range again.

The PCR is back to 1.16, favouring bulls to some extent for the immediate term and if there is an increase in the OI for 5100 calls during intraday when market tests 5100, it is more likely to pull back.

Resistance levels : 5068, 5085, 5111

Support levels : 5030, 5006, 4980

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Bulls and bears equally poised...Wait and watch for now ?!

Bears had a strong hold on Nifty on friday and pushed it to close lower than the 20 DMA which is at 4957.

The put call ratio has turned to 1.05, showing an equal balance between the bulls and bears. There has been increased accumulation in near strike calls and a decrease in the open interest on the near strike puts, indicating now that this market can see some lower levels before giving a bounce.

In any case a break and close of 4900 levels at this levels would impart strong bearishness and would push Nifty to test 4806 levels.

As of now, it is a wait and watch situation and the best thing to do is to stay out of the markets for a while.

Resistance levels : 4964, 4985, 5006

Support levels : 4921, 4895

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Range bound with 5000 pivot with heightened volatility ?!

Market is in range bound mood with 5000 level as the pivot and this is continuing with heightened intraday volatility.

It looks like slowly a bullish undercurrent is building, though it is too early to bank on that. The nearest out of the money calls have all decreased open interest and for puts there is an increase.

There could be a test of 4960 levels from which this market could bounce back to new highs in near term.

Resistance levels : 5021, 5039, 5069

Support levels : 4978, 4961

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With 5000 as pivot, move continues either side...

Two days back it looked like market is going to consolidate around 5000 levels, with 5000 being the pivot and markets to sway up and down that level.

But then, intraday patterns are suggesting a different trend each day. Day before it charted out a bullish trend and yesterday it has clearly charted out a bearish trend.

There is also a strong bull trap seen at 5041 levels and as said earlier, 4956 should act as a strong support in the intermediate term. As of now it looks like no end of the day trend is emerging and it is better to stay out.

The overall PCR has increased to 1.37 suggesting bullishness, but then the put series of 5000, 4900 and 4800 have decreased open interest whereas the 5000, 5100 and 5200 calls have increased open interests and this suggest some amount of bearishness and reiterates the stay out theory as of now.

Resistance levels : 4997, 5007, 5039

Support levels : 4978, 4956, 4926

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Strength after testing 20 DMA. Nifty all set to move higher ?!

Yesterday markets went down straight to retest the 20 DMA around 4924 levels and gained sufficient strength to close almost near day's high with increased volumes.

The retest of 20 DMA has come after a long time gap of more than 25 sessions and it looks like Nifty is setting itself up for another bullish move in the short term.

The PCR ratio has increased to 1.32 which will also provide adequate support as and when this market pulls back and with an OI of 65 Lakhs for 4900 put reiterates that fact that the market is not going to go down 4900 levels in the intermediate term.

Resistance levels : 5039, 5069, 5088

Support levels : 4978, 4956

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A three day bearish reversal pattern...but still not much downside seen?!

There is a perfect three day reversal pattern on the charts and it looks like there will be a retest of 4956 levels soon and that will act as a strong support in the intermediate term.

It looks like with 5000 as the pivot, Nifty will be moving around for quite sometime and can consolidate for a longer period also in this month.

As of now, it is a buy when Nifty tests 4956 and possibly a sell at 5046 levels if 4956 level is not tested.

Resistance levels : 5020, 5046, 5069

Support levels : 4982, 4956

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Doji at the top with increasing volume. Weakness to set in?!

The last trading session saw some erratic moves with increased intraday volatility towards the end.

There has been increase in volume for the past few sessions and Nifty has formed a doji at the top.

Any move below 5046 would bring in bearishness and during this week, Nifty might also cool down to retest the 20 DMA which on extrapolation is at 4905 levels today and will be around 4956 in a couple of sessions and that should act as a strong intermediate support.

The PCR ratio is at 1.16, not signifying any major skew at present, though it indicates adequate support for the markets to be coming in at every fall and it is not likely to correct significantly beyond 4950 levels.

Resistance levels : 5097, 5122

Support levels : 5046, 5020, 4999

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Looks like the last leg of the momentum rally...

During the last two weeks of september series, I was writing that momentum will kick in and will take this market higher and it now looks like the last leg of the momentum rally is underway.

Options data and pattern still suggest some more bullishness, but then it is better to stay away and sit in cash in this kind of a situation rather than to jump in and get caught on the wrong foot.

PCR indicates 30% more puts in the system and there has been accumulation in 5000, 4900 puts which should act as support in the intermediate term. It looks like put writers benefited last month and now it could be the turn of call writers. Markets being pushed higher to write more calls and as of now there is no indication yet of this market correcting significantly on the down side.

A better strategy would be to initiate bear call spread, by selling 5100 calls and buying 5200 call if market reaches 5100 levels.

Resistance levels : 5099, 5124

Support levels : 5069, 5045, 5020

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