Posted By : Kishore B.S
Yesterday was the start of the expiry week and the momentum signalled to us that the markets and the Indices would remain volatile as the markets remained yesterday.
Last week the markets bounced back from its low of 5540 twice to close above the 5622 levels for the weekend, indicating us about two likelihoods as to the direction of the markets wherein the first direction was a bullish one above the 5640-50 levels with conservative target of the 5690-5730 levels by expiry and the other direction was bearish if the indices were to go below the 5550 levels with target of the 5522-5480-5440 to cover the Gaps made during the current rally.
However as I write this blog the SGX has been indicating that we could open around a 1% up near the target level of the 5690 for the day. And the charts are Indicating that the current rally today is a significant one before the expiry set for this Thursday.
The significance being for the reason that if the Indices were to close near the first resistance of 5690 then further upside seems to be capped before the expiry around the crucial pivotal resistance level of 5730-40 which has not been convincingly broken.
And hence one can take a conversative short in the rallies today with the above mentioned levels as stoploss, and on the other hand if the Indices open with Gap that would soon be filled and hence the call to short on rallies.
On the other hand if at all the Gap is covered today itself then those who have missed out yesterday can enter the markets again with the target of 5700-40 in mind by expiry of the current series……………..
Inputs: Mr. Hemanth.V, Faculty TA, Stock Market Institute – Bangalore)