Nifty trending in downward channel both short term and long term. It is just in last few minutes before end of the day that Nifty gave unexpected move. These kind of moves for few minutes, I don’t confirm this as a good rally. It wont change our technicals as well.
Gold has been trading in a narrow range since November. It just oscillates between 1000 point range of 28300 to 29300. At the same time it is giving a ascending triangular pattern which is mostly a bullish signal for further up-move.
Nifty opened negative in the morning and continued to play in the range of 4750 to 4850 since 3 sessions. Good for option-writers who started to eat premium as they are high in the beginning of the series. FNO turnover also quite less in the last 2 sessions. Now the key support on the downside is 4740 and close above 4860 only can unfold further move upside.
There is no thumb-rule that if the indicators are in over-sold zone then it doesn’t mean that it will give a certain bounce. When an over-sold or over-bought zone continues for a longer period then these kind of movements are inevitable. This happens not frequently and puts traders and investors in dilemma whether to take contra trade or not.
BHEL is a heavily beaten stock in since 52 weeks. It has lost almost 50% in one year. Now trading at 298. It is very difficult to digest these kind of moves in a stock which is one of the major movers in Nifty-50.
Nifty took trendline support at 5140 in the hourly charts. One can try small longs at this point with 20 point filter. If this is also broken then 5080 is inevitable support for Nifty. It has upper trendline resistance at 5280. Any up-move here on will unfold only above 5260-80 provided 5140 is respected initially.
It’s been really tough time for banks not able to show specific trend since 3 months from August 2011. ICICI Bank has been trading in the range of Rs.70 (820-890). This could be an acid test for all major banks like SBI, AXIS, ICICI whether they can sustain October’s low or not. All these banks just 5% away from the recent low in October 2011.
I’m going to share information regarding when to write options and how beneficial it is to write options provided it satisfies certain conditions:
Covered call and Covered put are both one of the best option strategies for those who trade in F&O segment. These strategies are used for reducing the loss if trade goes against our expected trend. F&O is a risky segment which always needs protection for the trader if something goes wrong unexpectedly in the stock.