First of all apologies for not updating blog for more than a month.
Nifty has been trading in 8350-8650 range for long time now. I guess time has come to break out of range. Right now bias seems to be downwards. So by principle of equality breakdown below 8350 should show 8050.
To be sure Nifty need to break and sustain below 8315. This would send it to 8200 and 8050 in steps.
Today Nifty has broken a triangle suggesting target of 8200. However last couple of weeks experience has been that Friday attracts buying and Nifty closes week with a long tailed candle. So a weekly close below 8350 is desirable for more downside.
Nifty has broken 200 DMA and 50 DMA as well, a weekly close below these would be highly bearish. So keep watching…
Against all general perception, market rose and closed above 8500. As written on July 1st, it succeded in fourth attempt to break 8500.
Technically, market is in bullish trend. It also has formed reverse head and shoulder pattern and have broken trendline as well. So as long as it is above 8490, pattern is in force and pattern targets are 9100+. A hiccup around 8850 might be seen.
So keep the things simple, long above 8500 and short below it.
Some indicators are in overbought zone, but overbought can remain overbought for a long time. So best guideline is 8500.
Combo of calls n puts suggested on July 1, should be continued.
So we are now at D Day. Everyone is waiting what Greeks would say on Sunday 5th July. However our market doesnt seem to be waiting.
Weekly close at highest point of week, sensex close above 28000 for two days and weekly as well. Market pokes 8500 but doesnt break. Call writing resistance at 8500 and put writing support at 8000. FII continue buying in cash and FnO.
What does these indicates? If it was not for the Greek event, all these are sign for a huge up rally. Will it break 8500 in gapup and rise another 200-300 points or take out previous high?
What if market is complacent and is caught on wrong foot? Many indicators in overbought zone? Will it go to retest 8000? Or lower?
Only market can give answers to these. Our strategy of holding call and put combo is designed to ride thru this period of uncertainty and still make return.