8 July: Nifty View

On Thursday, Nifty opened at 5634, and steadily moved up to conquer resistances of 5660, 5695 and 5720. Today was the sort of day, when traders have to identify the trend early and get in as soon as possible, otherwise they are left fighting the trend all the time. Nifty has cleared the falling trendline as shown in char now. Now it should maintain above that line for this breakout to be a valid one. However, it is also reaching overbought levels, and it will be interesting to see how far more it can go. By clearing 5700, it also means that a lot of Bears will be becoming Bulls from tomorrow. Further, we are approaching the 200 DMA once again, which will be an important resistance. At NiftyPower, this is the time that we would be looking to book out of positional longs, taken at 566o/5665 Future levels.

Lets see what the Options Charts have to tell us:


Although Nifty closed above 5700 today, and despite huge addition at 5700 PE by the Bulls, the OI of 5700 CE is still more than 5700 PE. We have two levels of contention right now. They are 5600 and 5700. Tomorrow's action should throw more light as to which camp is becoming weak at these levels. With all the above factors mentioned above, and the open interest chart, it does seem difficult for Nifty to go much higher from here.

For tomorrow, immediate resistance for Nifty Spot comes at5745 level. If it trades and maintains above that level, it will head towards higher level 5785 and 5800 level. On the downside, now important supports come at 5715/5720 level. If it goes blow this, supports are 5685-5650 and 5630 levels.

8 July: Nifty Spot resistance at 5745-5760-5785-5800. Support at 5715-5685-5650-5630 - www.niftypower.com

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