Markets to remain range bound and move up in the week after any initial weakness

Nifty last week was confined to a range and lost in the last two sessions of the week whatever was gained on wednesday. It closed the week at 6063 levels.

The PCR ratio is at 0.98 which is neutral and large increase in OI was seen in 6100, 6200 and 6300 calls as well as in 6000 puts.

Even if there is a break of 6000 levels for the week, market is likely to recover and move towards 6200 levels towards the expiry and might remain range bound.

Resistance levels : 6125, 6177, 6223

Support levels : 6036, 6018, 5952

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Intraday Chart - session 15th Oct 2010

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Intraday Chart - session 13th Oct 2010

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Intraday Chart - session 12th Oct 2010

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Range bound moves continuing in the week...

Nifty has been hovering in a tight range for the past seven sessions and it is likely on any further correction, a sharp bounce till 6200 levels can happen.

The PCR is neutral at 1.04 and the implied volatility in calls and puts are equally poised around 18 levels indicating a range bound move.

The OI in 6000 calls has not increased and is much lesser when compared to the near strike puts and calls and it is unlikely for the markets to break the 6000 barrier below for this series.

How to trade?

A buy around 6050 levels for a target of 6200.

Resistance levels : 6116, 6136, 6150

Support levels : 6079, 6050, 6036

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Strong momentum rally to kick in next week in midcaps

Nifty corrected significantly towards the end yesterday and closed near to 6110 levels after making multiple attempts to scale 6200 peak during the week.

The consolidation phase after the expiry week last week has continued throught out this week with markets remaining range bound.

A test of the crucial support of 6079 levels is possible for the day and even a close near to that and starting next week a strong momentum rally is expected especially in midcaps. There might be a momentary dip till 6036 levels which should be used for heavy accumulation. Nifty might still be hovering in a tight range for some time testing 6200 levels during early next week.

Options data is pointing to a range bound move with the implied volatility in both puts and calls remaining at 20 and the PCR is also neutral at 1.

A buy around 6079 levels is recommended for a target of 6200 levels.

Resistance levels : 6150, 6181, 6201

Support levels : 6110, 6079, 6036

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Intraday Chart - session 7th Oct 2010

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Intraday Chart - session 5th Oct 2010

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Intraday Chart - session 01 Oct 2010

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A strong bullish close for September series and a consolidation

Markets were trading below 6000 levels for major part of the day yesterday and as suggested in the option trade of buying 5900 calls, the upmove came after 2.30pm and saw markets regaining all it lost the previous day to close above 6000 levels exactly at the last resistance of 6030.

Now that we have entered the new series, there might be consolidation and range bound moves between 5900 and 6160 levels for a while. Options data is seeing increase in 6000 puts and unwinding in 6000 calls suggesting that 6000 might act as a strong support level for a while.

At present the implied volatility of both puts and calls is around 20 suggesting range bound moves.

Resistance levels : 6085, 6110, 6160

Support levels : 6014, 5995, 5965

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