31 Jan: Nifty View

As if the drubbing by the Bears was not enough for the Nifty, Global Cues also have started deteriorating now. Surely, the Bulls have some sleepless nights coming for them. We would not like to trade our markets after seeing the Global markets (unless the News becomes too Big to swallow, of course!), however, it is definitely not the time to be adventurous.

Nifty, after breaking its 200 DMA, is now set to test the breakout levels of September, 2010. If these levels also give way, it would make sense to stay out of Buying Mode till we get a confirmed reversal again. It is trading at oversold levels. If this fall has to halt, it should Halt before 5350 is breached on Nifty Spot. Otherwise, we will brace ourselves for more falls.

The Options Open Interest Table is given below. The high OI in Puts of 5500 and below indicate support for the Bulls below 5500 levels. 5600 is the new battle zone, 5700 being won by the Bears. Hence, 5630-5660 can be considered to be stiff resistance, if Nifty want to move up from here. On the downside, supports can be 5480-5460 levels. Break from this range will give further cues.

For tomorrow, intraday watch the levels of 5545 on upside and 5500 on downside on Nifty Spot. Break on either side of these levels can give good momentum trades of 30-40 points or more. Upside resistances are places at 5575-5590-5615. Supports on the downside are at 5480-5460 levels. If Nifty opens Gap Down or Gap Up beyond these levels, then traders can look for the break direction of first hour range to determine the trade direction.

31 Jan: Nifty Spot resistance at 5545-5575-5590-5615. Support at 5500-5480-5460-5400 - www.niftypower.com

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