F&O Outlook: Monday crucial for markets

The stage is set for a tremendous struggle between bulls and bears and Monday is likely to be a decisive day. Kamalesh Langote of VMFDirect.com has observed an expanding triangle at the last height of 50 points (4,270-4,220). This confirms the break of 4,220 with the target of 4,170 (4,220-50).

So far, these patterns have reflected 80 per cent accuracy and, hence, Monday will be a crucial day for the markets. The support and the resistance data indicated by the open interest positions in the Nifty's put and call options show that the Nifty's June contract may be settled in the range of 4,190-4,200.

The S&P CNX Nifty moving beyond the 4,300 level is ruled out as call 4,300 accounts for 25 per cent of the total open interest in call options. Similarly, the index is likely to see a downward resistance at around 4,200 as put 4,200 accounts for 25 per cent of the total open interest in put options. Moreover, 4,200 is also likely to be the resistance level as call 4,200 makes up 20 per cent of the open interest in call options.

Three sessions of upmove came to a halt on Friday as the indices of the BSE and the NSE opened on a high note on the last day of the week's trading and ended in the red. The indices dropped largely on account of profit-booking at the higher level. For the week ahead, we must observe the previous peak of 4,190 with support at 4,180. The index at 4,100 will remain critical for another week.