Nifty was moving in an upward channel and is expected to trade till 5550-5600 in the short term with a reversal above 6150. The index has completed a 5 wave pattern on the upside and forming a Head and Shoulders pattern in the hourly charts and the 61.8% retracement is around 5550-5530 levels. The neckline is around 5820 levels and we could see the formation of right shoulder in process. If we see a correction it can be in an A-B-C pattern and thus it wont be a straight line fall. The world market charts are also supporting a downward move but in Indian markets it would be a retest of the bottoms for many stocks. Hang seng is trading close to upper channel and can possibly slip to 22k levels and i am expecting dollar to touch 64-65 levels once again after consolidating close to 61-61.5 levels. The low of 5820 levels made on 25th Sep 2013 is the key and we could see a good fall below these levels and 5500 put October would be the best options contract to be bought in this downward move.As the expiry is close by we could see options premiums coming down and thus we could buy put options at a cheaper rate. With those wild swings if it reaches 5950-6000 levels too the market does not look like the one to go long. If we look at the US SPXVIX it is trading at the lowest levels fro it could rise and a tired US market could be a catalyst for the down move in the Asian markets too.
