NIFTY : Level 8660 & 8840 as Strong Resistance

Technical & Derivatives Analysis: 20 July 2015

NIFTY is struggling hard to keep its bullish momentum going. Bulls are just not ready to surrender against Bears and continued to bounce back from the support level in a range of 8000.

NIFTY is really going to test the patience of the traders who are short in this market. However, as you can see on the technical chart, Index is approaching the critical resistance at 8660 which is 61.8% Fibonacci Retracement level of the fall from 9100 to 7940. The PCR is at highly overbought level but due to heavy betting on PUT side, it may hold 8400-8500 till expiry and market will start showing its true colors in August month only.

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NIFTY Rollover % indicates more downside for May’2015 Series

Technical & Derivatives Analysis: 02 May 2015

“Game over for the Bulls” - that was the headline for my last article before April month began. I had also written that it will first trigger the stop losses for weak hearted short positions before showing its true color! And, what happened after that is all there in front of you. No ‘rocket science’ behind these predictions. A simple reading from Technical Chart and Insights derived from Derivatives Analysis….

What’s Next: Weekly chart clearly shows break below the trend line support. During the week it tested 23.6% Fibonacci Retracement level at 8150. Now, break below 8150 can take index to next target of 38.2% retracement, which is around 7570. Key derivatives indicator - PCR has reached oversold zone and therefore there could be some bounce back from the current level. However, 68% healthy Rollover number confirms continuation of downtrend and to my mind, any rise in the NIFTY Index would encourage bears to hammer the NIFTY more aggressively.

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NIFTY under Dark Cloud Cover! Game Over for Bulls?

Technical & Derivatives Analysis: 30 Mar 2015

Note that the view provided in this particular week’s article is not just for a week or so but considering the timeframe for rest of the year 2015. NIFTY Index has raised an alarm on Long Term Technical Chart. On monthly Candlesticks Chart from Oct 2008 till Mar 2015, which is long 6+ year cycle, Index has formed extremely bearish Candles at the channel resistance.

 February month formed a bearish ‘Hanging Man’ followed by bearish ‘Dark Cloud Cover’ candlestick in March. Hence, April 2015 month is extremely critical. NIFTY 200EMA at 8100 is the make or break level. Index must survive above this in April 2015 for bulls to keep their hopes alive. However, breaches 200EMA decisively will push market into deep long term correction cycle. For April 2015 series – the Rollover of Futures contract is at whopping 77%, indicating massive short build up for the series. But as you know, market does not allow people to make money easily. Therefore it is most likely to trigger the stop losses for weak hearted short positions before showing its true color! The pullback target is in the range of 8500-8600.

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NIFTY: Achieved 8700, now approaching next target @8500

Technical & Derivatives Analysis: 16 Mar 2015

It was predicted at the beginning of the month that the  trading range for NIFTY Index for March month is 9000 on upper side and the lower levels at 8700 and 8500.

On account of surprise from RBI, NIFTY did open at 9100 but as expected, came under tremendous profit booking, and closed below 9000. It first achieved 8700, bounced by around150 points and then finally broke 8700 on Friday. Index is now heading towards my next target of 8500. In the meantime the Options Writers are simultaneously building their potions around 8400 level as well.

So, keep watching this column for the next cues as Index approaches our target of 8500.

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NIFTY Range for March 2015: 8500 – 9000

Technical & Derivatives Analysis: 02 Mar 2015

I had boldly written in my previous article that NIFTY won’t cross 9000 levels till budget day and results are now in front of you… There was no rocket science behind this prediction. It was simply based on Derivatives insights.

Now budget fever is over and sharp decline in Volatility Index suggest not to expect too much from the market for March series. The upper side remains capped around 9000 and the lower levels are 8700-8500.

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NIFTY can’t cross 9000 till budget day event…

Technical & Derivatives Analysis: 22 Feb 2015

Majority of market participants are anxiously waiting for pre-budget rally. Options buyers are blindly betting on 9000 call options and at the same time Option Writers are coolly writing 9000 strike call! So, who do you think smarter? Needless to say that NIFTY is unlikely to cross 9000 level till last day of February derivatives contract expiry on Thursday, 26th.

Technically also the long red bearish Marubozu candle, which was formed on 30th January, is not so easy to cross. Hence, 9000 remains a strong resistance till budget day event.

 Keep watching this column for budget day clues immediately after expiry day on Thursday 26….

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NIFTY Target Achieved… What’s next?

Technical & Derivatives Analysis: 08 Feb 2015

Last week I had given a target of 8630 based on the Options buildup and Fibonacci Retracement. During the week NIFTY Index reached exactly near this level and closed the week at 8660.

What’s next? Monday opening is very crucial for the market. As you can see in the chart, if it break the technical level of 8630 decisively then the Index can fall up to 8540-8420 which are 50% & 61.8% Fibonacci Retracement levels. Derivatives data is signally break below 8630 as Put Writers were unwinding their positions at 8700-8600 strike on Friday and the highest OI buildup shifted to 8300 and 8500 strike prices. OI PCR is still at 0.87 which means there is some more room for NIFTY to slide down.

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NIFTY fails to break channel resistance… What’s next?

Technical & Derivatives Analysis: 02 Feb 2015

In my last week’s article I had shown how NIFTY index was approaching the channel line resistance. I had also written that the key derivatives indicators were signaling a fall but only after F&O expiry and exactly same thing happened on Friday.

What’s Next: As per the current Derivative Options buildup level 9000 looks difficult to However, market is in strong bullish trend and therefore one can expect immediate support at 8630 which is roughly 38.2% Fibonacci Retracement level and also previous breakout point.  Interestingly the PCR for Feb series is reset at 0.94 which also suggest possibly limited downside before pre-budget rally begins.

 

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NIFTY: Approaching Channel line Resistance @ 8930

Technical & Derivatives Analysis: 27th January 2015

Market is on fire on the back of one after another sentiments boosting news. The NIFTY movement looks unstoppable, however Index is now approaching channel resistance which is around 8930 level.

Key derivatives indicator – OI PCR is in extremely overbought zone. The sudden drop in Call option IVs is signaling early warning. With only three trading sessions remaining for expiry, I don’t expect any sudden major price correction but keep close eye on NIFTY Rollover for the next cue for February month. At the moment 8930 seems to be technical resistance for the current up move.

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NIFTY: Heading towards upper channel line @8550-8650

Technical & Derivatives Analysis: 05 January 2015

December 2014 F&O series ended with flushing out weak hearted NIFTY traders from their long positions. However, healthy rollover at 66% was signaling positive bias on expiry day for January 2015. In fact most of the Technical as well as Derivatives indicators are now signaling continuation of positive bias for the coming weeks.

Technical chart clearly shows how NIFTY index has taken channel line support around 7950-8000 and now heading towards the upper band of 8550-8650. Key Technical Indicators such has Money Flow and Stochastic are just crossing 50% mark signaling further strength. Unwinding of call options on Friday’s session further confirms continuation positive moment for Nifty index until it reaches 8550-8650 range.

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NIFTY Options unwinding on Friday signaling range breakout?

Technical & Derivatives Analysis: 07 Dec 2014

I had earlier written in this column that 8500-8600 level is going to be acid test for NIFTY. Considering exceptionally high NIFTY rollover, I had also forecasted the outcome of RBI policy and results are in front of you. NIFTY traded in a narrow range of 8500-8600 for the entire week and gave tough time for intraday as well as positional NIFTY traders.

However, those who are monitoring Call/Put Options build up must have noticed a dramatic change in the writing pattern on Friday.

There was simultaneous unwinding of Call and Put options signaling NIFTY is ready to break the 8500-8600 range. Decline in Future OI indicates that smart traders are covering their long positions. As per Options data, the trading range for December is now condensed to 8300-8400 on lower side and 8700 on upper side.

GOLD | Watch out 38.2% Fibonacci Retracement Support @ 24800

Record high 76% NIFTY Rollover, RBI Policy on 2nd Dec...

What to expect next?

Technical & Derivatives Analysis: 01 Dec 2014

NIFTY Index witnessed record high rollover at 76% for December 2014 Series. After expiry, NIFTY index kissed 8600 level immediately on next day and closed for the week on Friday just near the top. Market is propelling higher on rate cut hopes when RBI reviews the monetary policy on Tuesday, 2nd December. Record high rollover number indicates extreme bullishness among market participants.

However, stock market history says one need to be cautious when it enters into extremely bullish sentiments. Price has almost discounted RBI policy hopes by now. Hence, I expect limited positive reaction on any positive news. However, no change in the current rate would be considered good reason for massive profit bookings. Hence, 2nd December is the day for next cue. It’s too early to comment on Options cues but it is hinting that NIFTY range for December 2014 series is most likely to be between 8400 and 8800. Possibly on Monday we will have more confirmation on this.

Level 8500-8600, an Acid Test for NIFTY Index

Technical & Derivatives Analysis: 24th Nov 2014

I was expecting a bit of correction in NIFTY from 8400 level but Index did not give up on the gains and kept marching towards 8500 till Friday. Everyone seems to be bullish in anticipation of RBI monetary policy but Technical and Derivatives data is giving a signal of exhaustion for the Index. NIFTY needs to undergo an acid test before crossing 8500-8600 levels.

Key derivative indicator PCR (Put/Call Ratio) has entered into overbought zone. You can see in the above chart that Index is crawling upwards but OI (Open Interest) is constantly declining. Money Flow index is also showing –Ve divergence. As per Options build up, it is unlikely that Index will correct before expiry but fingers crossed for the December 2014 series! Keep close eye on NIFTY Rollover on expiry day for the next cue for Dec 2014…

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