Volatile Week Ahead July 14-18 - Santosh Gundecha

Astro View: I had written in one of my earlier article on July 7 that Saturn and Mars are in conjunction at exact degrees on July 11, in astrology sign of LEO, which is the enemy sign of Saturn. As a result, we witnessed a lot of uncertainty, volatility and bearishness. This happened not only in Indian markets but also in US stock markets, Crude, Forex , etc.

I was expecting stability to come slowly by July 15-18, but now I feel we will have to wait till at least until July 22-23. On July 21 there is a debate in Parliament. (A 'debate' means allegations and counter-allegations). On July 22, the government would take the Vote of Confidence. This points to the fact that until July 22, rumors would run overtime.

Technical View: On Friday, the Dow kissed 11,000 mark but managed to close above it. The 11,000 incidentally a good support on Dow.

On the Indian bourses, the Nifty future had 7-week consecutive weekly bearish candles, followed by a weekly candle 'Doji'. A doji signifies indecision. We are still moving in a range , but the range now is growing with rising volatility. One can consider 3800 to 4200 as the range for Nifty futures. However, we have good support at 3810 > 3750 >3700.

On the Daily chart, the Nifty Future had a bearish engulfing candle on Friday, thus eating all the gains of earlier 2 days.

Trading strategy: There is a lot of volatility in markets, however there are some traders who cannot sit without trading. For them, one could trade Options, as Options have limited risk. One strategy would be to buy Nifty calls, when the Nifty plunges toward the lower side of band. Do not forget to use stops here too.