11 Jan: Nifty View

The Bear attack is "ON" on the Nifty. In just last two days of trading, Nifty has wiped out nearly 300 points. Today, it came within striking distance of its monthly swing low near 5720 levels. How far more can it go? Nifty is trading at extremely oversold levels, and near important supports of 5720 to 5690. If a bounce has to come, it should come from these levels. Otherwise, brace yourselves for some more fall.

The Options data is for today is on expected lines with the Bulls finally starting to cover Puts at 6000 and 5900 strikes. However, the data also show addition of Puts at 5800 and 5700 strikes. It seems that Bulls are still confident of saving 5700 and 5800 for now. Having said that, these can also be a part of covered calls. Hence, it is better to look at other indicators and price action to confirm the support rather than only going by this data. As for the Bears, they are writing away calls with confidence as of now. The data shows huge amount of 30 lacs+ Call addition at 5800 CE, 20 lacs+ at 5900 CE and 10lacs+ each at 6000 CE and 5700 CE. From the Options data, a little over 5900 (5950-5960 max.) seems to be the ceiling for the Nifty in case of any bounceback.

For tomorrow, intraday traders look for a Long opportunity near 5725-5740 Nifty spot range. If Nifty is able to hold these levels, we may see a decent bounceback to correct the oversold levels. On the upside, initial resistance for Nifty spot comes at 5785-5790 levels. If it manages to clear these, it will lead to further short covering rally towards 5820-5845 and above. On the downside, break of 5725 will lead Nifty towards 5690, break of which can create further panic in the market and lead to another 100 point fall.

11 Jan: Nifty spot resistance at 5790-5820-5845-5890. Support at 5740-5725-5690-5650 - www.niftypower.com

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