What the markets did last week ?
-Happy Trading
Last week saw markets play the range with the first two sessions in red, followed by a neutral session and the remaining two sessions in green. Overall Nifty lost 0.31% for the whole week.
Technically markets have also closed above the 20 period moving average on a weekly basis for the second time after testing sub-5000 support levels.
What does the options data indicate ?
Options saw hectic activity during the week with heavy writing in all the near strike puts. 5000 puts saw huge accumulation with an Open Interest (OI) of 90 lakhs contracts. This is closely followed by 4800 puts. On the call side, there was more of unwinding seen in the last trading session and though 5200 calls saw huge accumulation, majority of the in the money calls saw unwinding pointing to bullishness. Also the writing seen in 5200 puts indicate that markets will break out of the tight range and will move on to test 5200 levels in the earlier part of the week.
What can be expected this week ?
An initial move towards 5200 levels during the start of the week and as on now a strong breakout of 5200 levels is not evident and is likely to face selling pressure around 5210 levels.
4965 is a very crucial support level as has been indicated in the daily writeup last week and a break of that level will be extremely bearish for the market. Data and patterns at this stage is not suggesting a break of that level soon.
How to trade for the week?
A long around 5100 levels for a target of 5200 during the early part of the week. Based on further changes in the options data and pattern, more trading updates will be posted in the daily writeup.
Weekly resistance levels : 5150, 5201, 5245, 5278
Weekly support levels : 5098, 5012, 4965, 4885
