Friday, September 2, 2011
Price touched low of 4720 last week close to lower median line ( Schiff ) also a parallel to the trendline connecting highs of previous swing.
This week though short, has give a wide green bar , retracing previous swing.it has touched the downsloping median line.
Two probabilities if bullish
1.The price can zoom through the median line next few weeks to attempt testing of the upper median line till around 5500 levels.
2.Price can retrace till 4850 levels and then continue upward journey .Upper side targets will be at approx 5200 -5400 levels.
3.the price breaks down through 4720 - swing low, then lower levels targets can be 4500 - where it touched the Lower median line parallel of the larger APF .Further downside can be worked out as the the chart evolves.
Trade Plan for next week
Futures + options Covered call/ put trades.This is the basic plan but entry prices will have to be finetuned as per premium of calls / puts.Stoploss for future will be 30 points and calls / puts closed.
1.Sell 2 lots Sept futures @ 5100 levels + Sell Sept PE 4900 , Sell Sept PE 4800 - Target 4850 levels .
2.Buy 2 lots Sept future @ 4850 levels + Sell Sept CE 5100- 1 lot , Sept CE 5200 - 1 lot - Target 5200-5350 levels .
3.If price breakdown , Sell 2 lots Sept futures below4720 levels , Sell Sept PE 4500 / 4400 1 lot @.