Nifty made a smart move on Monday and gave an intra breakout above 5745, reaching its next resistance of 5760. However, it could not sustain above 5745, and once it slipped below it, struggled to cross 5745 again. On the downside, it took good support at 5720 levels.
The Options OI data show addition of Puts at 5700 PE and 5800 PE strikes. Addition of OI so near to the expiry is always a worrying factor. Those who are writing these options at this stage, they are either a very confident lot or absolutely crazy. Only time will tell.
Now that Nifty has crossed and closed above 5730, Bulls will have some hope of the downtrend being over. There is still stiff resistance to be crossed at 5760-5765. If Nifty manages to stay above 5765, it will move higher towards 5790-5830 levels, where once again it will face stiff resistance and selling pressure. On the downside, strong support for Nifty spot now comes at 5715. Break of this level would lead Nifty test 5695 again, which is a strong support. Break of this would further lead to downside movement towards 5660-5635 levels.
25 Jan: Nifty spot resistance at 5745-5765-5790-5830. Support at 5730-5715-5695-5665 - www.niftypower.com
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