26 July: Nifty View

After 11 trading days, Nifty has broken out of the falling trendline again. Will it sustain this time and head for 200 DMA? Technicals are definitely better this time, with the Daily RSI and stochastics well positioned to sustain an upmove. However, Nifty should respect the supports that it has formed on the way up. It did not do so last time. Only if it does so this time, will this upmove be more credible. The Options Open Interest data would give more clues a crucial junctures.

The Options OI charts are given below -



Although we always say that the Options Data so near the expiry is not reliable enough, we have to see it in light of the current technicals. The Bulls have added huge amount of OI at the 5600 PE and 5700 PE strikes. After today's move, the Option OI charts also indicate a breakout from the range of 5500 to 5700. The new range being established now is 5600 to 5800, with 5700 being the centrepoint. 5600-5620 would be important levels for the Bulls to save, in the event of any downmove now.

For tomorrow, resistance for Nifty spot comes at 5700-5705 levels. Above this, it will encounter its strong resistance zone of 5730-5760 levels. Trend will remain positive as long as it stays above 5665-5670 levels tomorrow. On the downside, support for Nifty spot comes at 5665 levels. Below this, it will test support levels of 5640 and 5615 levels. A close below 5615 would put this breakout in question again.

26 July: Nifty Spot resistance at 5705-5730-5760-5785. Support at 5665-5640-5615-5585 - www.niftypower.com

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