Weekend Analysis

1. Volume Profiles :

The 5d profile shows selling at higher levels and now a resistance developing in 6130-40 level for short term trading which will have to be crossed for immediate upmove.

The 10d profile shows positional selling at 6175-85 zone.This has been brought to notice in last week's analysis also.
http://o-j-n.blogspot.com/2010/10/weekend-analysis.html
Big players have been selling each time the markets trade above it.This shows the changing market structure to weak or at the best sideways in days to come.

The range mentioned last week ,6070-6185, was crossed for a day to again come back in the range to close below it ,suggesting false breakout & weakness.

Mok's post on profiles shows that the close is below Value Area Low (VAL) in all time frames suggesting weakness in Market structure.
http://o-j-n.blogspot.com/2010/10/nifty-future-profile-daily-weekly.html


2.Indicators :

 The Hourly Indicators are exhausted in the oversold zone ,suggesting the correction to be over in near future and a bounce on the anvil. (There is a high volume zone below 6070 level at 6020-30 ,from where a bounce can be expected)

The short term Daily Indicators are almost in neutral zone which can trade either ways.

The medium term Daily Indicators show sell signals after negative diversions ,suggesting weakness in medium term.

3.Option Analysis :

The Max. O.I. buildup at Put side is at 6000 strike of approx 85 lacs. and that on Call side is at 6200 strike of apprx. 73 lacs. The unwinding of 6200 puts and addition of 6200 calls in last couple of trading sessions indicate reisitance at this level & also that market failed to move in the new trading range of 6200-6400.

The important support of the series remains at 6000 level .There is no strong buildup of above a crore or so in O.I. at any level till now, ( as in last couple of months) this also suggests caution.

4. Pattern :

The channel pattern discussed last week was broken conclusively .The trendlines suggest weakness below 5960 level .

So, There is profit booking above 6185-6200 levels since first week of October and there will be weakness below 6000 levels now.Trading may still be in the 6000-6200 range before new trend developing. The correction below 6000 levels will be fast and furious. 

Trade Light till the range resolves.