4 May: Nifty View

Nifty sold off heavily today after the RBI rate hike news, finishing midway between 5500 an 5600. By doing this, it has closed below its important support zone of 5600/5610. Now, till it stays below this level, consider the Medium term trend to be down.

The Options OI table is given below:

The Options OI table show the Huge confidence of Bears at the moment. More than 1Cr of Calls were added today at various strikes. Approx. 60 lacs at 5600 CE and 5700 CE alone. On the other hand, the Bulls were much more subdued. Covering was seen at 5700 PE and higher levels, while some addition was done by the Bulls at 5600 PE and below levels. The Options OI data at present suggest a bounce at least till 5600+ levels and maximum till 5700 levels. Climbing above 5700 would be really tough for now. Todays high of 5710 would be the trend deciding level now in case the Bulls try any reversal.

For tomorrow, immediate resistance for Nifty Spot comes at 5575/5580 and then at 5610 levels. Above 5610, we will see a relief rally towards 5630-5655 and 5690 Nifty Spot. This rally can be used to build Positional Shorts with stoploss above 5720 closing basis now. On the downside, immediate support for Nifty spot now comes at 5550 levels. Below this, next supports come at 5515/5505 and 5475 levels. As Nifty is trading at oversold levels, Selling on all rallies will be more safe than selling on breakdown of supports at this point.

4 May: Nifty Spot resistance at 5610-5630-5655-5690. Support at 5550-5515-5475-5450 - www.niftypower.com

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