Thursday, February 10, 2011

Will It be a Black Friday ???


1. Relentless FII selling continues .Today the selling was stepped up to apprx. 950 cr.

2. This week's trading has been with lower highs, lower lows and lower close each day.

3. Option Analysis shows  build up of  open interest at 5300 call and  5100 puts.

4. For the second consecutive day was unable to even touch the 5350 level in trading.

5. Volume profile of the trading this week shows initial resistance at 5250 level and major resistance at 5320 level. Today's NF vwap is also at 5244. The Pivot levels show that trading below today's low can reach the S2 at 5156 .

6. As observed in one of the previous posts , the Descending Triangle of apprx .600 points has the likely target near 5150 level which also concides with the Trendline support .

7. In the Short Term analysis post , the likely EW target for the 3rd wave was calculated apprx. 5150 level.

So ,This week is unlikely to close above 5300 levels (5320) and trading below 5250 tmrw. can target 5150 level or below.

-Shorts to be booked in phased manner and cleared below 5200 -5150 level , to start a fresh next week. (may be some aggresive buying here)
-Aggresive longs intraday on trading above 5250 for a target of 5300+ ( may be due to short covering ,if gives a initial dip and holds )

Wanna Go Shopping Tomorrow ???


Anonymous said...

very good---dil se likha hai

mynac said...

The analysis was fantastic.It was Black & White Friday.But... considering the trend the White can convert in to Off White in to Black any time/any day is the fact.Earlier the huge built up in PE's was relief for Bulls but in down trending market it has become threat.The powerful sellers,who wants to sell after certain up side used to buy the lower strike PE's at throw away price,whenever they see technical bounce back & then starts to hammer from top to bottom,is the reality.

AAR VEE said...

@Thanks Anonymous


Agreed that it was black and White one .Only the diktat it didnt follow was to close above 5300 though closed below 5320.(wishful thinking)

Once we got an initial dip below 5200 and then reversed ,it was expected that short covering was to take it to 5300 + levels .

U r right in analyzing option buildup ,i too have frequently written that the big o.i. that 5400 pe had whould cause a flash 200 point downfall if breaks the level ,it didnt take even two full trading sessions to do so.

But the good trade was to buy 5300 calls in the second half they zoomed more than 50% in price.:)