There has been lot of pessimism built for this series and markets have also gone down significantly during the first two weeks of this May series. Everyone is talking about markets able to hold on to 4800 levels for the series, but no one is looking for a strong up move from this level.
There has been a few indications that markets might rally in the expiry week and can even test 5200 levels before the close for this expiry.
Bulls have been slaughtered and don't seem to have some energy left for the run up and bears have become more complacent after markets failed to move above 4950 levels, though the initial bearishness of where this market will stop the fall is now out of everyone's mind and are confident that it will not drop below 4800 levels.
The reason for the expected upmove is that throughout the series, the implied volatility of calls have been kept very low when compared to the puts and the bounce seen in the past two sessions from day's low is only seen as a dead cat bounce by the majority and going contrarian at this stage could pay off. Having said that, there has to be a stop loss strategy for going long at this juncture and it is on a spot move below 4875 levels.
A strong support has been established around 4890 levels and this view holds good as long as markets don't breach that level on the downside and stay for sometime below that in the coming days.
- Happy Trading www.tripleint.com
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