The Daily Indicators are exhausted and giving positive diversion in the oversold region. Much of the correction may be over
2. Volume Profile:
The 10d Volume Profile shows buying / accumulation at lower levels of this correction.
Support is buildup at 5650 level and Trading above 5700 may be positive.
3. Price Action:
The closing price is above 5d low ema and near the 5d ema. Trading above this may target 5d weekly lowema and 5d weekly ema i.e. 5750 and 5800+ levels.
The chart gives the Trendline trading of both long and short term. It suggests 5500+levels as strong support.
5. Option Analysis:
The Jan series is to expire in the coming week in a truncated trading week.
-In the Put side,the Max. O.I. Buildup is at 5600 strike and the near Call is at 5700 strike.
-The Calls at 5700 and 5800 strike exceeds their respective Puts.
-Rollover to next series is low .
-The most striking figure comes out ,that may throw light on the action to unfold,is the Feb. series data. 5600 stike Puts have added a decent Open Interest and is the highest accounting both the Calls and Puts .
So the last days of this series may end up in a range bound,volatile trading between 5600 and 5800 levels with 5700 as pivot .Max. action may be seen between 5650 and 5750 levels with expected Expiry in this zone.
For the next series the 5600 level is firming up as a good support.
The 50 and 200d sma are still bullishly aligned with prices testing & trading near the the 38.2% fibo. level of the upmove since 4675 levels.The support comes near 200dma and trading above this can target the 50 sma level.
7. EW analysis:
I am counting the upmove since 4675 level ,Feb'10, as the base level.(taking it as final Intermediate wave of the upmove since March'09).
The Primary count suggests that we are in the 4th wave of the upmove which is correcting by 38.2% level.Currently the C wave of the 4th is in progress. Pl.read the above chart for reference.
This count is valid till the 5400 level (end of wave 1) holds.In case it gives way ,the Alternate count will come into play ,which suggests the wave 5 already over at recent top and this correction is a part of the Larger A-B-C correction of the upmove since March 09.
The details of the correction of this 4th wave are in the chart below. It may be ending as a triangle pattern in the C wave.
So,combining all aspects -
This series may end up in a range bound trading .So,Trade light for few days.
5600 level seems a strong Support going forward.( Breaking of which may test the 5500 level (50% fibo), longs may be created near these levels for short term trading.
5400 is the Game Changer level for the Bulls which will open the floodgates of a bigger correction to come in this year.The caution comes from persistent FII selling and USD movement. so keep a s/l of 5400 level closing basis for Positional trade .
Happy Trading !!!