It has been a long time since our last comment, but as long as you knew the zone was 7250-7350 then that was all you needed.
Basically, the final week of the September expiry, 16th to the 20th Sept, was all about either 7250 or 7350, although the upper boundary was certainly the more tested out of the two.
And then again, the first week of the new October expiry, 23rd to the 27th September, has also been all about the zone.
The first two days were all about 7350, with intraday highs of 7362.30 and 7348.97 respectively.
The Wednesday was all about the other end, with the intraday low of 7212.96.
Nevertheless, all three days closed back inside the zone.
The fun started on Thursday, and it was quite the epic battle, again at the upper boundary, but this time desperately trying to keep the close above 7350.
It was exceedingly close, but in the end, they managed it, ending at 7351.08, having kept the closing auction to just a small move.
Of course, we can all see what happened on Friday, and after such a long battle, the breakout was totally overdue.
From here on up it now gets interesting, as R1 starts at 7450, and perhaps worth noting, is that Friday’s intraday high was 7440.77.
We aren’t going to point out the differences in the ratios in the two columns above, as you can easily see for yourself how they have evolved.
But, suffice it to say, 7450 is now a critical level, being this market first encounter with a R ratio, and don’t ignore the fact the corresponding ratio does not appear until 7200, which is a long way away.
Range: 7350 to 7450
Type: On balance bearish
Nb. Our comment on 10/10/19
WOW! And how critical R1 at 7450 proved to be……in fact the last paragraph above pretty much sums up what has happened since we last published, back on Monday 30th September.
The intraday high on the following Tuesday was 7433.24, which just showed how trepidatious the market was of R1 at 7450.
The other end of the trading range way back then, was 7350, the upper boundary of the zone, and the intraday low that day was 7352.83.
That was a bandwidth test, which normally means a breakout the next day.
The market duly obliged, and with 100-points of zero ratio below it, the market already had momentum by the bucket-load by the time it hit the lower boundary.
Which did put up a fight to be fair, but when the market closed below it, this was an ominous sign.
Then it was simply all about which level of R ratio was going to be enough to stem the tide.
As you can see above, they have fallen below the zone, which itself has also fallen, very significantly.
So, R3 was at 7050 at the start of that week, and is now 6950, so we suspect it was 7000 a few days ago.
More to the point, one can still see how significant 7150 is.
Although regaining the zone is currently the most important factor for this index, so 7200 is absolutely critical, especially with the expiry looming next week.
For intraday levels, please just look at the above table in the meantime.