8 Feb: Nifty View

In Yesterday's Nifty View, it was given that "...immediate resistance for Nifty Spot comes at 5420-5425 level, above which, it will try and reach 5445-5460 levels..". Whole day Nifty remained rangebound between our first resistance of 5420 and our first support of 5395. Then it finally broke out above 5420 to make a high at 5440 levels, before slipping again below 5400 and closing Flat. Trading by the levels would have given any trader easy 20+ points even in this rangebound market. Also, as mentioned in the chart above, Nifty did not give any hourly close below 5400/5395 today. Going forward, any hourly close below this level would be the first sign of further weakness. Keep watch.

The Options Open Interest table is given below:


The data presents the same story as yesterday. 5400 is the support and 5500 and above offer weak resistances. There is not much difference in Open interest of Calls and Puts at 5500 and 5600 levels. Hence, whenever we see a short covering rally, it can easily take Nifty back to its earlier breakdown point of 5560-5565 levels, which is a good 150+ points from todays close. On the downside, the moment the writers of 5400 PE start to cover, it will cause real panic for further steep falls. 5350 may be that level, break of which can cause that panic. This gives us a range of 200 points from 5350 to 5550 to trade. Positional traders trade this range till we get a confirmed Breakout/ Breakdown from these levels.

For tomorrow, immediate resistance for Nifty spot comes at 5425-5430 levels. Above this, it will again try to reach 5445, 5470 and 5500 levels. On the downside, support for Nifty Spot comes at 5370-5375 levels. Break of these would test lower levels of 5350, 5330 and 5300 levels. At the extreme support and resistance levels, we would expect to see some quick volatile moves. Trade cautiously.

8 Feb: Nifty spot resistance at 5430-5445-5470-5500. Support at 5390-5370-5355-5330 - www.niftypower.com

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