Market Outlook for the month of July

July 6, 2012   ·   0 Comments

Trading Strategy:

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Until yesterday’s session, indices were struggling to  close above 5300 mark. Hence, we witnessed a  cluster of narrow range body formations. We had  mentioned the positive placement of ‘ADX (14)’  indicator in our previous report. The impact of this technical tool was seen during yesterday’s session as  indices finally moved in favor of the bulls and  managed to give a decent intraday rally.  The hourly  chart indicates a “Flag” pattern breakout and thus we  expect further buying interest from market participants. The resistance level for the day is at  17687  / 5386. Conversely, 17351/ 5263 level may provide decent support on the downside.

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 Yesterday, Bank Nifty opened on a positive note and gained strength as the day progressed to close near the highest point of the day. We had mentioned in our Previous report that once, above 10555 level we may witness a sharp rally towards 10645 – 10830 levels.

We continue to remain optimistic on the index as the charts in higher degree time frames are still indicating a further up move. However, considering the over bought condition on momentum oscillator  (stochastic) on the daily chart, some consolidation or minor pullback cannot be ruled out. The resistance levels for the day are at 10740  – 10830 levels. On the downside 10523 – 10480 levels are likely to act  as support in coming trading session.

 

for the month of July:

 FII’s were net buyers in cash market segment; they were net buyers worth of  `429/- cr. On derivatives front they were net buyers in both index futures and  in index options.

On options front 5500-5600 call option have seen  good amount of buildup in open interest and 5300  call option have seen some unwinding its much of the  short covering over there, while in put option 5200- 5300 strike  price  have seen maximum buildup followed by some unwinding in 4800 put option in  yesterday’s trading session.

 Right now, highest open interest is at 5000 Puts and 5400 Calls, which shows the immediate support and resistance for the market. Last month I asked people to put 10% of the money at the levels of 4800 and asked them to buy consistently if market keeps falling below the levels of 4850.

Check the last month prediction here:

Market Outlook for the month of June 

The readers who would have acted upon the advice would be making significant money right now. If one wants to take some partial profits, he can take it levels above 5350. Let us know what you are trading/investing at this point?

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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