Estimates for 26th July.

Good Morning All.

The market’s have opened within friday’s value and have been quickly rejected near the 5466 level we have been watching.

On the lower side, 5423 is the first line of support.

As on friday, for the upward momentum to return, 5466 and then 5486 have to be taken out.

But also noted is the fact that there was no significant selling in the 5423-5430 zone.

On another note, on expiry weeks Reliance Indutries generally does well at the start of the week.

Look to buy above 1062 as a swing trade set-up.

I will put up a chart shortly.



Expiry week :

There are normal weeks for trading and then there is an expiry week.

I have always looked at the expiry week as a “special” week to trade and have made different rules for it.

Most of you would be familiar with our expiry calculations of the Nifty based on the VIX.

In expiry weeks, I also recommend the buying of stock and index options which I would not do on any other week simply because the NSE is not very liquid in stock options despite having the Nifty which is the No 2 traded future in the world.

In expiry weeks, time premium as a factor is out of the option math, and if you are clear on the direction, it is very easy to take a leveraged call ( or put).

I have also noted the behavior of certain stocks to be a bit different in this week, irrespective of the trend they may be in.

Now there are no certainties, only probabilities for us to take our trades.

One such stock is Reliance. It is my observation that a large percentage of times, the stock does well in the first part of the expiry week.A back test has yielded good results even when the Nifty has been drifting down.

Have a look at this chart too :

Reliance1 Estimates For 26Th July.

Notice the high vol region around 1057 levels.

Using that as a support the stock can move higher to 1074 and 1090.
Value area low for friday was 1062.

As mentioned, traditionally too the stock has done well at the start of the expiry week.



Value areas :

10036-10060-10083 for bank nifty
5442-5453-5465 for Nifty.




Sbin Estimates For 26Th July.

SBI was a very bad trade.

Trying to pick a bottom is in itself bad.

Perfect trend day in the stock.

My reasoning was that the consolidated value ( 2 yellow lines) would support the price at 2441-2444.Instead it moved swiftly in the other direction taking our stop at 2436.

The seller has been strong since morning in the stock and has been in control as what happens in a trend day.

Looking ahead 2418-2425 should be a reference level now.But not a candidate for longs at all.

In a trend day, we do not take an opposing view. Lesson learn’t again.



US futures currently at 1099 levels, above the value area high of 1097 from friday.

1096.5 is also the level where the seller was overcome.

Looking for that level to hold up in day trade today over there for a target of 1129 and 1159.

Nifty has got strong supports in the 5408-5411 region.I won’t think of shorts till that level is broken down.