Jun21-W2: Nifty Index 5- to revert to mean this week (Jun7 to Jun11)?

Beginning last Monday with a high range bullish candle, Nifty continued its upward momentum. In such a scenario, my target for Nifty was 15650 but it even breached 15700. I can’t complain much as it is always tough to give a target when skies are clear. And well, Nifty did close the week at 15650 anyway.  

Now, here’s what I am looking at:

I now have a hard bias for mean reversion as this is the kind of setup wherein I like to sell call options. It is entirely possible for Nifty to go above red trend line but that would be a fake breakout. My target for now is the green rectangle around 15450.    

Thus, scenarios for the week ahead (highlighted as yellow box in chart)…

ScenarioProbabilityAnticipated Price Action
ConsolidationMedBetween 15600 and 15850
DowntrendHighIf breach below 15600; to drop till 15450
UptrendLowIf breach above 15850; to rise but not by much

The daily ATR of Nifty has been declining steadily and may bottom out in a couple of weeks. Low ATR is a pain for option sellers as they make safe money but not much money. Things shall become interesting when ATR turns its head upward again.     

DISCLAIMER: I am not a SEBI registered adviser. All the information provided on this website is for educational / informational purposes only and should not be taken as investment advice.