Nifty Long Term view... Option writers .. Watchout !!!

Nifty View :

As you can see on the chart, Since Nov 2010 Nifty has been trading in a range which is being compressed week after week. Within next 4-5 weeks we can see Nifty
breaking out from these shackles on the either side ( preferably UP      ). The logic behind is that within this range which is narrowing week after week,  the space left
in this region can accomodate 4 more candles ( which eventually turns out to be 4 more weeks ). It is expected Nifty can breakout on the either side but a confitmation
comes only if it crosses previous intermediate highs/lows. We can see a move of 1000-1200 points in NIfty in next 6-12 months time frame i.e a 20 % move on either side.
So by this logic we may be headed to 6800-7000 on upside or 4300-4500 on downside. So for next few months naked Option writers or Option traders those who
indulge in Short Strangle & Short Straddle strategies should keep these possible moves in mind and keep a note of risk involved.

Our View: Once Nifty closes above 5750 on weekly basis, we expect it to test 5950-6050 range first and then correction is expected upto range of 5750-5800 - retest of
the breakout. And then finally starting a big rally till 6800-7000 levels. The view would be negated if Nifty closes below 5500 after giving a breakout above 5750.

Regards

Ankit
Technical Analyst
Analyse India

Nifty Positional View - 10% move on cards

Nifty View:

This is a weekly chart of Nifty and as you see that since month of November or  Feb when it made a bottom around 5200, it has been making lower highs and still holding on to precarious 5200 level on downside. One thing is for sure that we are posied for a big move in the Index on either side during next few months as we expect it will break this pattern sooner or later. Now two key levels to watchout for next few months are 5700 on upside and 5200 on downside. After strong bounceback from previous lows of 5200 Nifty is facing strong supply around the falling blue trendline zone of 5700-5750.  Only a WEEKLY close above 5700-5750 zone will give a confirmation of a bottom in place and will give start to an uptrend that can give 8-10% returns in short time

Regards

Ankit
Technical Analyst
Analyse India