22 Aug: Nifty View

On Friday, under big negative pressure from the global markets, Nifty somehow managed to save its 200 week SMA and closed above it. This level has now been well advertised in the media, and will be a point of last hope for the Bulls. We head into the expiry week, with the Bulls clearly defeated in this series. Hence, the expiry should be more painful for them than the Bears. Remember, in a falling market, forget the Supports and only care about the Resistances. Think of a trend change only if Nifty manages to cross any of the strong resistances (earlier supports) that it has created. Some of these levels are 4950/4980, 5050/5080, 5110/5150, 5180 and 5230. These levels can be the stoploss for shorts based on the risk capacity of traders.

The Options OI Charts are given below:

The Options Charts are not to be relied upon so close to the expiry. This series has not been much of an Option Writers series anyways. Hence, any addition to the Option OI so late in the series has to be viewed with suspicion. On Friday, the Bears pushed the levels further down, adding more than 50 lacs+ of OI at 4800 CE to 5000 CE strikes. On the other hand, the Bulls added 30 lacs+ OI at 4600 PE strike, while covering a big amount of 30 lacs+ at 4900 PE and 5000 PE strikes. The range from the Options charts is 4700 to 5000. 4800 is a minor support, while 4900 is a minor resistance. This is a broad range, going into the last week of the expiry, and hence, volatility should continue in the last week also.

For Monday, immediate resistance for Nifty Spot comes at 4875 levels. Above this, it will head for 4900+ levels, facing tough resistance at 4930 and 4950 levels, which can be used to create shorts with stoploss as given above. On the downside, support for Nifty Spot comes at 4830 levels. Below this, it will slip towards Friday's low of 4795 and 4750 levels. Since Nifty is trading at such oversold levels, hence, shorts should only be created on Rallies at Resistance areas rather than on break of Supports to have a better Risk:Reward ration on trades.

22 Aug: Nifty Spot resistance at 4875-4895-4925-4950. Support at 4830-4795-4750-4725 - www.niftypower.com

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