Nb. Our comment from 06/21/19 (Not published)
Nb. Our comment on 06/27/19
We have to mention the June expiry before we get on to July, and at the start it was all about the bottom of its zone, 7150.
In the middle, it was all about the top of its zone, 7250, and at the end it was the top of the first ratio bandwidth above their zone, or in other words, 7450.
The intraday highs on the last four days being 7469.19, 7454.93, 7460.83 and 7456.79, but always closing below.
Also, the isolated highs do not do justice to how much of a pitched battle it was at that level throughout those respective days.
More importantly, July’s zone has conveniently adapted, as naturally it would, after all, the ratios are a direct reflection of business done.
By comparing the two tables above you can discern in which direction the ratios are moving, which in turn, denotes increasing or decreasing levels of support and resistance.
The most blatantly obvious is the appearance of Y1 below the zone.
Further down from that the support ratios have actually increased, but you can’t miss the fact that these levels are a lot smaller and a lot further away than the resistance levels above the zone.
Obviously, in the meantime, we expect this index to be zone-bound for a while.
However, eventually, it is likely to breakout, and when it does the ratio levels above the zone ratchet up very quickly.
And for those who need clarification, then above the zone you hit R1 after 50-points, at 7500, whereas, below the zone, the corresponding R1 is 200-points below the zone.
So, as it stands, the downside risk is considerable, and the upside is limited.
Especially, with the jump from R1 straight to R3, remembering these ratios are exponential.
Therefore, don’t be fooled by this quiet start, as the potential for big moves is certainly there.
Range: 7350 to 7450
Type: On balance just fractionally bearish