Nifty Weekly Review
The Nifty ended the week on a weak note losing 77 points against the previous weekly close. This was in stark contrast to the 311 points gain during the week before last. Earlier this week, we had indicated that the Nifty was in an overbought zone and that the downtrend would continue. The markets did oblige and we were able to book good profits riding the volatility.
The trading range for the Nifty during the week was between a high of 5360 and a low of 5202, which will form the trading range for the next week too. The next week has only 3 trading days with trading holidays on 07th Nov 2011 on account of Bakri-Id and on 10th Nov 2011 on account of Guru Nanak Jayanti.
In the above chart, the Bollinger Bands are suggesting a falling trend-line. The EMAs are attracting each other however the near EMA is trading below the far EMA. The MACD is rising from a negative zone. The ADX is suggesting a trend-less market.
We believe, that during the next week, the volatility will be high and that a break-out from the current trading range is going to be difficult.
The strategy would be to look out to buy Nifty 5400 puts when ever the markets are trading above 5340 and to liquidate them when the Nifty trades around 5240.
Another way to look at this would be to buy 5200 Nifty Calls when ever the Nifty trades at the bottom of the range and liquidate them above 5360.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
The Nifty ended the week on a weak note losing 77 points against the previous weekly close. This was in stark contrast to the 311 points gain during the week before last. Earlier this week, we had indicated that the Nifty was in an overbought zone and that the downtrend would continue. The markets did oblige and we were able to book good profits riding the volatility.
The trading range for the Nifty during the week was between a high of 5360 and a low of 5202, which will form the trading range for the next week too. The next week has only 3 trading days with trading holidays on 07th Nov 2011 on account of Bakri-Id and on 10th Nov 2011 on account of Guru Nanak Jayanti.
In the above chart, the Bollinger Bands are suggesting a falling trend-line. The EMAs are attracting each other however the near EMA is trading below the far EMA. The MACD is rising from a negative zone. The ADX is suggesting a trend-less market.
We believe, that during the next week, the volatility will be high and that a break-out from the current trading range is going to be difficult.
The strategy would be to look out to buy Nifty 5400 puts when ever the markets are trading above 5340 and to liquidate them when the Nifty trades around 5240.
Another way to look at this would be to buy 5200 Nifty Calls when ever the Nifty trades at the bottom of the range and liquidate them above 5360.
Happy Trading !!!
For cash market recommendations see our Daily Pre Market calls on NSE
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