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Hi!
While there was a good sunshine all along that suddenly the dark clouds have started approaching. But first, how the last week was different :
During the last week, after a long time that the US$-INR rate dipped below 48 Rupees a dollar, but recovered thereafter.
On the weekly charts for Spot Nifty, last week’s candle was a near Doji with open at around 4977 and close at around 4959. On both the sides were the long wicks, thereby indicating the volatility. It also indicated that efforts to move either up or down were done half-heartedly and did not sustain.
The scene on last two days for the Nifty Options OI also gave indications. While on 24th Sep, the settlement day, the OI outstanding in the diminishing order were :
4900 PE-4800 PE-5300 CE-4700 PE- 5000 CE
which gave a good support at 4900 level and also a good resistance at 5300 level, but indicated a hurdle at 5000 to cross and go up.
On Friday 25th Sep, the picture changed to –
4900 PE-4800 PE-5000 CE -5300 CE-4700 PE
making the resistance at 5000 more stronger than 5300.
Therefore, the next week may see a sideways movement of the market confining itself to the smaller range of 4900-5000 and the larger channel of 4700-5300 levels.
But this need not upset anyone. While the US and Asian markets were down, Indian markets stayed in the green on some days last week. This, in a way, is an indication that the negative influence of external markets on Indian markets has started diminishing.
The BBs are inside the KBs and are about to meet. The high of the weekly candle is somewhere nearby. The 10 Weeks EMA Red line is coinciding with the up trending trend line. So, if the markets continue to move sideways, within a week or two that the pressure shall get developed for the markets to decide…. Whether to stay above the trend line and move up, or to give up and fall below the trend line to make the things difficult.
That is because, once the trend line is broken and the Nifty is below it, that the trend line shall offer a very strong resistance, difficult to break.
As of now, there is no clear indication from the charts, but by a week or to, we shall see the effect, that shall tell us well in advance, whether there is going to be a stable govt in Maharashtra or not.
One must not forget that both BSE-NSE being in Mumbai, the capital of Maharashtra, that there is going to be some effect of the assembly elections due in this month, and the results of the elections.
But as usual, I am expecting the markets to indicate the results even before the polling takes place…. But we need to wait for sometime to see that on charts. One clear indication would be if and when the Spot Nifty goes above the recent high of around 5037 on 22nd Sep…. one could expect a stable govt in Maharashtra…. could be Congress-NCP or Shivsena-BJP. If not, there is likely to be a horse trading of Aayarams-Gayarams.
One comment on Murtaza’s posting of 13th Sep. Let’s take the first example he has mentioned, which is –
“when we hit 4720, we never thought abt 4350 and we hit it thrice in a week”
These are trading advantages. If we are in a region…. say 4500 for Spot Nifty and I go long on 4500 Nifty Calls, and the markets start falling, I just short the futures to cover my calls. When the markets go to the lower level, say of 4350 that I do nothing. But as they start recovering and come above 4400 that I square off my futures and go extra long in 4500 Calls.
For that one must be sure that the markets are temporarily down and are going to recover and therefore, one must manage to stay away from Fear…. which comes only from Greed. And this would depend on everyone’s mindset and experience in the markets.
All my opinions, and I could be wrong.
Cheers!
SS
While there was a good sunshine all along that suddenly the dark clouds have started approaching. But first, how the last week was different :
During the last week, after a long time that the US$-INR rate dipped below 48 Rupees a dollar, but recovered thereafter.
On the weekly charts for Spot Nifty, last week’s candle was a near Doji with open at around 4977 and close at around 4959. On both the sides were the long wicks, thereby indicating the volatility. It also indicated that efforts to move either up or down were done half-heartedly and did not sustain.
The scene on last two days for the Nifty Options OI also gave indications. While on 24th Sep, the settlement day, the OI outstanding in the diminishing order were :
4900 PE-4800 PE-5300 CE-4700 PE- 5000 CE
which gave a good support at 4900 level and also a good resistance at 5300 level, but indicated a hurdle at 5000 to cross and go up.
On Friday 25th Sep, the picture changed to –
4900 PE-4800 PE-5000 CE -5300 CE-4700 PE
making the resistance at 5000 more stronger than 5300.
Therefore, the next week may see a sideways movement of the market confining itself to the smaller range of 4900-5000 and the larger channel of 4700-5300 levels.
But this need not upset anyone. While the US and Asian markets were down, Indian markets stayed in the green on some days last week. This, in a way, is an indication that the negative influence of external markets on Indian markets has started diminishing.
The BBs are inside the KBs and are about to meet. The high of the weekly candle is somewhere nearby. The 10 Weeks EMA Red line is coinciding with the up trending trend line. So, if the markets continue to move sideways, within a week or two that the pressure shall get developed for the markets to decide…. Whether to stay above the trend line and move up, or to give up and fall below the trend line to make the things difficult.
That is because, once the trend line is broken and the Nifty is below it, that the trend line shall offer a very strong resistance, difficult to break.
As of now, there is no clear indication from the charts, but by a week or to, we shall see the effect, that shall tell us well in advance, whether there is going to be a stable govt in Maharashtra or not.
One must not forget that both BSE-NSE being in Mumbai, the capital of Maharashtra, that there is going to be some effect of the assembly elections due in this month, and the results of the elections.
But as usual, I am expecting the markets to indicate the results even before the polling takes place…. But we need to wait for sometime to see that on charts. One clear indication would be if and when the Spot Nifty goes above the recent high of around 5037 on 22nd Sep…. one could expect a stable govt in Maharashtra…. could be Congress-NCP or Shivsena-BJP. If not, there is likely to be a horse trading of Aayarams-Gayarams.
One comment on Murtaza’s posting of 13th Sep. Let’s take the first example he has mentioned, which is –
“when we hit 4720, we never thought abt 4350 and we hit it thrice in a week”
These are trading advantages. If we are in a region…. say 4500 for Spot Nifty and I go long on 4500 Nifty Calls, and the markets start falling, I just short the futures to cover my calls. When the markets go to the lower level, say of 4350 that I do nothing. But as they start recovering and come above 4400 that I square off my futures and go extra long in 4500 Calls.
For that one must be sure that the markets are temporarily down and are going to recover and therefore, one must manage to stay away from Fear…. which comes only from Greed. And this would depend on everyone’s mindset and experience in the markets.
All my opinions, and I could be wrong.
Cheers!
SS