6 May: Nifty View

The sell-off continued in Nifty today, after one day of minor pause yesterday. As given in earlier post, Sell on Rallies should be the mantra, rather than going short on breakdowns. This is to ensure a good Risk: Reward Ratio as the market is trading in Oversold region in almost all time frames.

The Options OI table is given below:

The Options OI data points show 5500 and 5600 as the battleground levels for the time being. Hence, any rally if it comes, should not be expected to go much beyond 5600 for the time being. Supports exit at 5400 and below levels. Resistance exists at 5700 and above levels.

For tomorrow, immediate resistance for Nifty Spot comes 5475/5480 and 5495 levels. Above this, Nifty will show a retest of todays breakdown level of 5515-5530 levels. If it manages to trade and sustain above 5530 for sometime, then we will see a quick short covering rally from the Bears. Till then, it is better to sell on rallies and build short positions. On the downside, immediate support for Nifty spot comes at 5420-5425 levels. Below this, it will slip to lower levels of 5395, 5370 and 5355 levels. Create short positions at Resistances during rallies. Shorting on break of supports may be profitable, but carries a very high risk, as now anytime we may see quick bounce from oversold levels.

6 May: Nifty spot resistance at 5475-5495-5515-5535. Support at 5450-5420-5395-5370 - www.niftypower.com

Visit here for Nifty Intraday Tips