Nifty has done with the upside target of 6250 and is expected to trade till 5950-5900 in the short term with a reversal above 6270. The volume data is the major concern for the current up move and i expect it to correct till 61.8% retracement one of 5900-5950. I am not expecting a deeper correction just because of the optimism in the market but two major indices which are midcap and the banking index are at major resistance points and bank nifty is not even reaching the previous highs. If we see the volume data nifty it was huge on negative closing days. Thus i am expecting a retracement move to the current up move and 5900 put November would be a good bet for this downside move. Bank nifty can give a corrective move to its 20 and 40 day moving averages close to 10300 levels but expect this as only a bull market correction and not as the beginning of a bear market . The medium term trend is up as far as 5750-5800 holds and i don't expect other indices to give a break down even if nifty comes down just because it would give some time for traders for accumulation. The premium in futures contract is very less and it clearly says that people are less interested at higher levels and waiting for a dip to buy more and thus there is a possibility of increasing premium at lower levels though the scenario is very rare in nifty. Expert options traders would write options at this juncture as it can be more profitable because the downward move would not be that steep. The trade setup can be like this
Buy on 5900 put and on any major dip add stocks than calls as the range bound market scenario is developing and as a retailer it would be very irritating unless and until you are an options trader.
Short term trend - Down
Target - 5950-5900
Reversal - 6270
Medium term trend Up
Target 6500
Reversal 5750
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