Just when things seemed in place and the participants geared up to cheer the bulls after the Thursdays closing above the 5700 mark near the pivotal level of 5720-5730, the markets took a dive on Fridays trading session. The dive or correction on Friday was so sharp that the entire gains registered on Thursdays trading sessions was eroded at point of time.
Though the markets recovered in the last hour of the trading session to close above the 5680 levels yet the doubt of the continuation rally seems imminent now. The markets have defined a clear trading range between the 5630-5730 levels now which is a tight 100 point narrow range. And with the expiry of the current month series set on this Thursday the direction of the markets is set to be marred with lot of volatility and unpredicatability.
The charts which had hinted that the rally is likely to further on above the 5730 mark now seems to be proving correct that unless that point is not crossed it would be wise to take fresh longs and follow the strategy of buy on dips unless the 5630 levels is held. And any break down below this levels should be used to exit all longs and expect the markets to correct till the strong support zone of 5400-5440 levels. Where the new view can be taken according to the charts.
On the higher side since this expiry week is short trading week with 2 holidays one before expiry and another after expiry, the trend is likely to remain volatile with just the above mentioned points in focus.
(Inputs: Mr. Hemanth.V, Faculty TA, Stock Market Institute – Bangalore)