Wednesday, September 28, 2011

Nifty on way to close higher for this F&O settlement

The September F&O expiry takes place tomorrow. The settlement started on August 26, Friday, opening at 4844. We closed today at 4948. Barring unforseen events, it seems reasonable to assume that tomorrow's close should be above 4844. To this extent, the September month was a period of consolidation.

The month of September has seen a narrow range movement in the Nifty. Remember, after contraction comes expansion. This tells us to expect large moves in October.

The Nity itself remains in a bear market. The sign of an intermediate up move will be the cross above the 50 day moving average. For the Nifty, this may take some time since the average currently stands at 5166. This is also the zone of resistance for the Nifty. We can safely assume that a rally above 5165 will be the signal of a change in the trend to up.

Much more interesting is the trading range in the Nifty with support at 4750 and resistance at 5165. If and when this zone breaks, we can expect a significant trade from the breakout / breakdown.


satya said...

respected sir,

Howto identify trends or to develop a view on markets !

rohit said...

A bit confused, expansion means a large move in either side right? or it means only in the up direction? You mean to say that either we go down a lot or we go up a lot right?

rohit said...

Then is it a good idea to buy a 4700 put and a 5200 call, because either we go up a lot or we fall, a lot.

Suresh said...

I have recently started reading your blogged and I am quite impressed. I have the following query :

Few day back when Nifty was around 4800 with a bearish bias (before it dropped to 4760), some analysts on TV channels predicted that it will eventually pull back to around 5000 close to expiry since VWAP (Volume Weighted Average Price) for September was approx. 5000. Would like to know your views on VWAP. How is it calculated for Nifty ? Is it based on Volume weighted price of Nifty Futures or is it calculated based on volume weighted value of underlying 50 shares that makeup Nifty 50. Is there any public site that publishes value of VWAP Intraday or on EOD basis, thanks, Suresh

K_Vir said...

This is in response to query fro Sh. Suresh. NSE website provides VWAP on a continuous (intra-day) basis. At EoD this value is EoD VWAP.

Point related to monthly basis VWAP is new for me and I do not know if any web-site provides that.