June 3: Nifty View

On Thursday, Nifty opened gap down below 5550, tested 5520 and then recovered to close at 5553+. Once again, it reacted in a similar manner near 5600 as it had done on previous occasions, by giving a big Gap-Up/ Gap-Down. This level is becoming the most important level of 2011. For now, 5585 and 5615 are the next big resistance for the Nifty, while 5520 and 5500 are the supports. Any move outside of these levels should be considered a breakout/ breakdown.

The Options OI data is given below:


The Options OI table is quite clear as of now, and substantiates our levels given above. 5500 and below are the supports, while 5600 and above are the resistance zones. The range given by option table is the 100 point range between 5500 and 5600. However, a closer look at the numbers will show that there is not much of a difference between the Put and Calls of 5500 and 5600 strikes. The difference can vanish in one day, if Nifty break out of the range. Seems like the option writers are also waiting for more confirmation.

For tomorrow, upside resistance for Nifty spot comes at 5585 level. Above this, it will head for 5600/5630 levels. Above 5630, we will see some panic among the Bears, and a quick short covering rally. On the downside, support for Nifty spot comes at 5530/5520 levels. Below this, we will see a test of 5505 level. If it trades blow 5505/5500 for some time, Bears will taste blood again, and will try to drag nifty to 5480, 5440 levels tomorrow itself. Intraday traders can trade the breakout/ breakdown as per the levels given.

3 June: Nifty spot resistance at 5585-5600-5630-5660. Support at 5520-5500-5480-5440 - www.niftypower.com

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