On Friday, Nifty opened with a Gap Up and continued its rise till the end of the day, leading to heavy short covering from the bears. In the process, it cleared many crucial resisatances, which will act as supports now during any pullback. On the upside, it is now within striking distance of next major resistance at 5515-5530 levels, above which, a test of the all important 5605 is inevitable.
The Options OI data is given below:
As expected on such an up day near to expiry, there was no addition in any of the Calls from the Bears. While the Bulls went on the rampage with Puts of 5300, 5400 and 5500 Strikes. Total of 80 lacs+ addition in these Puts was done by the Bulls. While such exuberance so near the expiry is definitely questionable, however, if Nifty now manages to hold 5400, it might well mean that the short/medium term bottom is in, and we might be headed to much higher levels from here on.
For tomorrow, the first resistance for Nifty spot comes at 5475 level. Staying above this, it will target strong resistance zone of 5515-5530. As stated earlier, above 5530, we should get another round of panic short covering from the Bears, till 5600 levels. On the downside, support for Nifty Spot comes at 5420-5430 level. If it slides till this level, it can be used to build positional longs with stop and reverse below next support level of 5370-5375.
27 June: Nifty Spot resistance at 5475-5515-5535-5580. Support at 5420-5390-5370-5345 - www.niftypower.com
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