Market sees upward bias; gains expected this month

https://economictimes.indiatimes.com/markets/analysis/market-sees-upward-bias-gains-expected-this-month/articleshow/9072270.cms

June trading was marked by some strong two-way action and for those that got the directions right, it would have been a good trading month. But markets these days are dominated by option players who are generally against the main trend and such players may have therefore found the going difficult.

We raced upwards from a mid-month low to finish the month around the highs, laying the groundwork for some further gains in the coming month.

This positive trend helped the rollover action for the month to be on the higher side of a threemonth average. Options OI at the start of the month suggests a bunching of positions at the 5400-5600 strikes. This is too narrow a band and will doubtlessly widen in the weeks ahead. Currently , the bias remains upward as the price patterns suggest continuation rather than a reversal of the ongoing trend.

Momentum readings, however, are yet to get into sync with the price action but if the rise keeps up, we should be able to soon see that too. Volumes have indeed picked up as FII buying has returned to markets after a while. We also saw prices exceed their monthly pivot after a lapse of about three months (the last time this happened was in April).

Thus, we step into July with a sense of expectation of further gains. Looking at the month from a seasonal perspective, I find that it has a tendency to give positive returns .

The important periods for the month are the dates around July 11 and July 18 (for a high) and July 25 (for a low). There is a distinct possibility that the high that we see in July may not get exceeded for the next three months.