For the month of April, the range arrived statistically was 5500-5900. We ended up doing 5477-5962 with a close at 5930. Now let us look at the month of May. There is one disturbing fact for May.
1. The low of the May month is always much below the close of April moth. The close for April was 5930 and a close of 6 pc below that leads us to a figure of close to 5600.
2. Overall, May month on an average leads to a flat close.There are swings of at least more than 3 pc either sides on a closing basis. This means we may close the month of May at 6100 or 5750.
3. What this also implies is that for the month of May, the upside is limited. In case, of a large fall early on the we will spend the rest of the month covering up for the fall and makig a margial gain.
4. Taking, this hypothesis further it means we are likely to get 2 sufficiently large moves on either side. If 1st half of the moth is negative the the second half will be positive or vice versa.
5. If we take the May high, the it has also usually been at least 6 pc higher than the April close. This could mean upsides of 6300.
If we look at all the probabilities, it means we are in for big moves in May.
The moves could play out as:
1. Up in the beginning of the month, then highs of around 6300 and settle down near 6000.
2. First a down to 5600-5700, then a close to around 6100 levels.
The conclusion from this is that may is a month of big moves, once one catches the direction it would pay to hold on to positions till a move of about 4 pc is made in any 1 direction.
5700 and 6100 remain the immediate 2 possibilities with extreme moves taking us to 5600 or 6300. Right now we are almost at the center of the range. Sustaining below 5900 or above 6000 will give us the clues to the next moves.
1. The low of the May month is always much below the close of April moth. The close for April was 5930 and a close of 6 pc below that leads us to a figure of close to 5600.
2. Overall, May month on an average leads to a flat close.There are swings of at least more than 3 pc either sides on a closing basis. This means we may close the month of May at 6100 or 5750.
3. What this also implies is that for the month of May, the upside is limited. In case, of a large fall early on the we will spend the rest of the month covering up for the fall and makig a margial gain.
4. Taking, this hypothesis further it means we are likely to get 2 sufficiently large moves on either side. If 1st half of the moth is negative the the second half will be positive or vice versa.
5. If we take the May high, the it has also usually been at least 6 pc higher than the April close. This could mean upsides of 6300.
If we look at all the probabilities, it means we are in for big moves in May.
The moves could play out as:
1. Up in the beginning of the month, then highs of around 6300 and settle down near 6000.
2. First a down to 5600-5700, then a close to around 6100 levels.
The conclusion from this is that may is a month of big moves, once one catches the direction it would pay to hold on to positions till a move of about 4 pc is made in any 1 direction.
5700 and 6100 remain the immediate 2 possibilities with extreme moves taking us to 5600 or 6300. Right now we are almost at the center of the range. Sustaining below 5900 or above 6000 will give us the clues to the next moves.
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