20 Dec: Nifty View - Still Indecisive?

In our last Nifty View, we had written that Nifty was in an indecisive mode as of now. It is an Option Writers market as of now, which is operating within a range, although with high volatility. Thursday's decline below 5880 and then 5860 (although momentarily) gave us a false sense that the Bears are finally going to win the battle of 5900. However, it was not to be and we saw a fast short covering rally which took the Nifty up my almost 100 points from the lows.

Although Thursday's movement would have given the Bulls some heart, we would like to watch the movement on Monday to see whether the Bulls have strength to take this market above 6000. The Options OI data also show Call covering by the Bears at 5800, 5900 and 6000 levels and Put addition by the Bulls at the same levels. Still, there is massive OI at 6000 CE levels and we would like to see some balance between the OI of 6000 CE and 6000 PE, before Nifty heads higher.

For Monday, the levels to watch on the upside are 5950-5970 and 5910-5930 on the downside. On any correction, if Nifty again goes below 5915, that should set the alarm bells ringing for the Bulls. The downside support for Nifty then comes at 5880-5850 levels. On the other hand, if we open up above 5960, OR move above 5960/ 5970 spot and then are able to sustain it, then we can see some panic short covering from the 6000 CE writers which can take this market higher to 6030-6060 kind of levels. Keep this levels in mind and trade accordingly till we get a confirmed move either side.

20 Dec: Nifty spot resistance at 5955-5970-5995-6030-6060. Support at 5945-5930-5910-5880-5850 - www.niftypower.com

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