Archive for the ‘Bull Trap’ Category

Bears showing strength…Will 4900 be tested and broken before expiry ?!

Monday, October 26th, 2009

In the last week, each day had a move to trap the bulls at some higher level and then bears took total control to close almost near the day’s low.
This clearly indicates that majority of the bulls are trapped at each level and friday’s intraday pattern also suggest that a strong bull trap is seen around 5050 levels which should act as a strong ceiling for this series.
Looking at the PCR, it is now at 1.12, though not favouring bears much, but the fact remains that the PCR has been decreasing when the markets were under bears control last week. The OI in 4900 put which reached more than 70 Lakhs has now cooled off a bit to 53 Lakhs which could also mean that the strong hands which wrote the puts earlier could have covered and now there is a good chance of this market to retest 4900 levels before expiry.

Resistance levels : 5018, 5032, 5045

Support levels : 4985, 4968, 4945


Happy Trading

A retest of 5050 levels and then a 50:50 chance for bulls and bears ?!

Wednesday, October 21st, 2009

The intraday pattern of yesterday totally favours bears, a new high being tested and then a strong pull back and to add to that a very powerful bull trap at 5150 levels.
It now looks like Nifty might fall again to test the 20 DMA around 5050 levels.
The PCR ratio is at 1.33 which is favorable for the bulls and so a strong correction seems to be ruled out at this stage. That is why it looks like a 50:50 chance for the bulls and bears when 5050 level is breached.

Resistance levels : 5131, 5150, 5169

Support levels : 5109, 5086, 5068, 5054

Happy Trading