24 Dec: Nifty View

This month has turned out to be an Option writers paradise. Will it end this way too?

Last few days, we have seen Volatility dipping sharply on the Nifty. Options writers are really making merry this month and it shows in the Options OI table. The Bears are busy writing away Calls at 6000 and 6100 strikes, while the Bulls are working their way with Puts at 6000 and 5900 strikes. 6000 is acting as the pivot for Now. Last few days compression on the Nifty has sure given Option writers some confidence. However, we would advise them not to forget the extreme Volatility we got so used to just few days back. A breakout above 6000 or a breakdown below 5900 would be really fun to watch before expiry, which can give the traders quick 100+ points. Looking at the Options table, we do not expect Nifty to expire outside of the range of 5800 - 6100 as of now. Having said that, breakout/ breakdown above/ below 6000/ 5900 can change the picture quickly. If the writers of either 5900PE or 6000 CE cover, we will have an action packed Expiry.If not, then keep scalping small profits on intraday basis.

For tomorrow, watch the action near 5995-6005 spot for upside moves. If Nifty manages to trade above 6005, it will again attempt 6030 and 6060 on the upside. If it sustains above 6060, we can see some short covering towards 6100 levels. On the downside, watch 5970 Spot for some support. Below this, Nifty may again attempt 5955-5935 and lower levels. Sustained move below 5950 would cause the 5900 CE writers to panic and cover. Do remember that Puts at 5900 and 6000 strikes have been added very recently and these guys would panic first in case of any downmove. On the contrary, the 6000 CE writers had their positions from the start of the series and are already in decent profits. Hence, they would not be in a hurry to book out unless Nifty sustains above 6000 for sometime.

24 Dec: Nifty spot resistance at 5995-6005-6030-6065. Support at 5970-5955-5935-5905 - www.niftypower.com

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