21 Sep: Nifty View

Today, Nifty opened near to its closing price of Monday, and took off from there, clearing one resistance after another. Today was a trend day, and those who could get in early on the breakout above 5050 or 5080, reaped the benefits of the move. For others, it was just a wait and watch day. Nifty is now at its crucial supply zone of 5180 to 5230 once again. This is happening just before an important news day in the US on 21 September. An Option Straddle would be a good trade to take at this juncture. As for those who are positionally long, 5110 and 5080 would now become important stoploss levels to watch for invalidation of this upmove.

The Nifty option Open Interest charts are given below:

The Bears covered a huge amount of 28 lacs+ OI at 4800 CE to 5000 CE strike. The Bulls added a huge amount of 43 lacs+ OI at 4900 PE to 5100 PE strike. Such exuberance from the Bulls before an important news event does raise some concerns. Still, as given earlier, this might be a good time to buy an Option straddle. Overall, the range from the Option Charts is 4900 to 5200. 5000 is a minor support, while 5100 is a minor resistance.

For tomorrow, immediate resistance for Nifty spot comes at earlier important level of 5180. Above this, it will head for its next strong resistance of 5225-5230. Above 5230, lies the gap area and will lead to some wild volatile moves. On the downside, support for Nifty Spot now comes at 5105 levels. Below this, it will revisit support levels of 5080 and 5050. If moves below 5050 also, then Bears will take control.

21 Sep: Nifty Spot resistance at 5180-5195-5225-5260. Support at 5105-5080-5050-5020 - www.niftypower.com

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