Morning Cut Recommendation

Hello,

 

Markets went sideways into a consolidation range with the total range of the market itself (Nifty)  being limited to a mere 32 points. This can be seen as either a step up zone for the next major move upwards or this was a period of distribution (which seems unlikely given the small range and buying by FII's).

 

Yesterday US markets once again moved up once again and hence reduced a chance that markets here will open in negative territory and hence provide a potential for a Evening Star Pattern. The validation of such a pattern will increase if markets break below yesterdays low while it would get invalidated if we break above yesterdays high.

 

Yesterdays high zone of 5110 will act as short term resistance point above which the next resistance is at 5500. On the lower side, support for nifty exists at 5465 and 5515. Implied Volatility of ATM Nifty options dropped further to 14.8 while PCR ratio for Nifty came in at 1.42.

 

 

Prashanth

Mythri Stocks & Shares Pvt Ltd.,

 

 

Morning Cut Reco

Hello,

 

Our anticipation of a bullish move based on the Hammer Candlestick chart formation worked beautifully. Markets opened positive and shot up in the afternoon on back of strong US Futures / European markets. With the US Markets having closed very strongly, we are sure to rise above our next resistance level of 5500 but the bigger question that remains to be answered is if we can break above 5550 in this move.

 

While Oscillators on the daily charts are still in the mid range, on the hourly charts a strong rise can pull them into Overbought territory from where a reaction - either time wise or price wise - can happen. Put Call Ratio on Nifty came in at 1.41 while Implied Volatility dropped to 15.8. Resistances for Nifty are at 5500 and 5550 while supports come in at 5400 and 5350.

 

Regards

 

Prashanth

Mythri Stocks & Shares Pvt Ltd.,

 

Morning Cut Reco

Hello,

 

Markets stopped at the crucial 5350 level and bounced back from there to create a hammer candlestick pattern. The Hammer is a bullish reversal pattern that forms after a decline. In addition to a potential trend reversal, hammers can mark bottoms or support levels. Since it has come after a decline, hammers signal a bullish revival. The low of the long lower shadow implies that sellers drove prices lower during the session. However, the strong finish indicates that buyers regained their footing to end the session on a strong note. A confirmation of hammers require further bullish confirmation. The low of the hammer shows that plenty of sellers remain. Further buying pressure, and preferably on expanding volume, is needed before acting. Such confirmation could come from a gap up or long white candlestick. Hammers are similar to selling climaxes, and heavy volume can serve to reinforce the validity of the reversal. Yesterday's volume while not very huge was more than the volume of Monday and hence significant.

 

Put-Call Ratio on Nifty came in at 1.47 and Implied Volatility at 17. Maximum Put open Interest is at 5400 further confirming that 5350 may sustain for the short term. Among Nifty Call Options, 5500 - 5600 carries max OI thus signifying the resistance at the level.

 

Regards

 

Prashanth

Mythri Stocks & Shares Pvt Ltd.,