Update for 28th February 2011

    Markets Waiting for Direction from the Budget !

• Here is a quote from the last post : "The immediate minor resistances above the market are at the 5350, 5400 and 5450 levels. The lower minor supports are at 5225, 5175 and 5125."
• Last Friday's trading range was confined to the first levels of support and resistance given in the above quote.
• After the Thursday's derivative expiry lead free fall, Nifty futures opened higher on Friday. 
• The futures contracts tried to test the previous day's close immediately after the open. It then tried to test the resistances above.
• As expected, Nifty futures reversed from the reference level of 5350 and moved towards the lower reference level of 5225.
• It seems that many market participants are waiting to take a view on the market after the presentation of the union budget on 28the Feb.
• Therefore, some short covering came in to market which caused the market to recover and close at almost exactly at the opening levels. 

   Nifty Futures - Intra-day Chart

       Nifty Futures  - Daily Chart 

Update for 25th February 2011

   Market Breaks the Trading Range and Dives !

• This blog had been warning that the upward momentum is waning and market is finding it very tough to break out above the supply zone between 5550 and 5600. It was also indicated that if the market is unable to move upwards, it will certainly test the lower supports and even break the lower supports. 
• The last post even said that though the Put writers may try to defend the 5400 level, it was too early to decide that the expiry may happen above the 5400 level, because of the rising crude oil prices.
• It was also indicated that the break from the trading range may happen in one of the last three days of the week. The only question which was left at the time writing that post was whether the Put writers would be able to defend the5400 level till the close of expiry.
• Since now we know that the Put sellers were unable to defend the 5400 level, let's examine what happened actually in Thursday's trading.

     Nifty Futures - Intra-day Chart