Hello,
While we closed positive for the week, the range of trade was very small, infact on the candlestick, we have made a formation called a "Inside Bar". Theoretically this is a reversal pattern, but since the candle has formed at a area where the moves have become very slow and small, value of this pattern may not hold to its potential.
On the weekly scale, this is the third week in succession wherein markets have neither broken down nor broken up. Options Open Interest for the current month have peaked at 5300 PE and 5600 CE giving us a wide range of 300 points within which the market seems destined to remain for the time being.
A lot of Analysts are calling for a top formation at 5500 and have indicated that by reaching 5487 during the week, we may have infact made a topping out formation. While there is no denying the fact that 5500 is indeed a very important level on several parameters, markets rarely move as predicted by the majority. Secondly no major bull markets have peaked out without a peaking out formation that happens with a sharp rise and then a sharp fall.
On a weekly level, one can remain bullish until we see a close below 5350 happening.
Regards
Prashanth
Mythri Stocks & Shares Pvt Ltd.,
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