Markets might head towards 4750 levels: Mitesh Thacker
November, 21st 2011
We are heading into the expiry which can probably add to some volatility. A couple of observation which I made over the weekend one is that the Friday's price movement can be described as a hammer gone on the candlestick chart. Typically, these patterns are formed when you open at a certain level, go down from those levels recover and close around the opening levels. So, we have got left a good ground and covered back that ground up again. These are typically reversal candles but they need to be confirmed and the confirmation happens when the market starts trading above the high of Friday's scandals.
Once we start trading above 4915-4920 we can say that in the short term which is basically for two to three days, I think we might get a bounce back. If we get a bounce back, it will be a feeble, a weak bounce back, an upward drift with supply coming in at levels of 4960-4990 that is the broader brand. On the downside I have talked about the price cap which held on very admirably on Friday at 4860-4830 was a very good level. We bounce back from those levels, we will retest those levels again.
So, it will be interesting to watch and before making a prediction we will need to see how the markets react. We are definitely oversold but my sense is that it might still take some time to settle down because we still have the volatility indicators in the rising mode. So we might be in for more choppiness but if 4830 breaks I think we are heading towards 4750. On the other side if 4920 is being captured we might get into a small upward grind.