May 13, 2014

Market outlook

Trend is up with support at 6850-6640 spot.

Note today's bar.... (a) gapup and (b) close near midway / towards low of the day.

The gapup was most likely caused by investors who missed this rally so far. The upper tail in the candlestick was caused by others/ smart money to book profits.

VIX dropped by 14-15% today. Yesterday, I wrote of a 50% correction and so the target level is 20... let's see. If this happens by MOnday, option buyers will lose a lot of money.

Option writing points to support at 6400 and resistance at 7500.

Fibonacci retracements point to strong resistance in the region 7175-7200.

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