What the markets did last week ?Last week markets saw bulls pushing Nifty towards 5300 levels, a rally which started in the early part of the week towards 5200 levels after powerful bear traps at 5141 and 5170 levels continued almost till the end. Also the rally came with increase in volume each day.
What does the options data indicate ?
Option data saw huge accumulation in the near strike puts on friday with large turnover in 5200 as well as 5300 puts. On the other hand 5300 call also saw heavy accumulation and a large turnover with unwinding in other near strike calls. The volume PCR reached a peak of 1.5 during the weak signalling extreme bullishness, and it has now cooled off to 1.29 still favouring a bullish move.
What can be expected this week ?
Though the options data point to bullishness, for a strong move beyond 5300 levels to happen a correction during the initial sessions is required with more of unwinding in 5300 calls and further writing in 5300 puts. Pattern-wise bulls are placed in a strong position, with bears trapped at lower levels of 5140, 5170. All this points to an expiry of above 5200 levels this coming thursday.
How to trade for the week?
Accumulate long positions at every dip till 5131 with the target for the week as 5331.
Expiry option trade will be posted separately.
Weekly resistance levels : 5302, 5331, 5406
Weekly support levels : 5245, 5191, 5131
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