9 Aug: Nifty View

It was the same story of Friday repeated today. Nifty opened with a Big Gap Down, only to recover most of the losses. But unlike Friday, where it closed near the highs, today it sold off again at the end, to close just above the opening levels. The S&P's downgrade of US has had the impact of increasing the volatility in the market. No one is sure how it will affect the markets and the economy, because this is a first time event. There is a camp which believes it does not change anything, while the opposite camp is equally strong, which believes that it will have a significant impact. Hence, the confusion in the markets is quite understandable. Anyways, for traders employing sound money management, this is the best time to take intraday swing trades or trade in Options for maximum gains.

The Option OI Charts are given below:



The Bulls are busy building base at lower levels by adding OI from 4800 PE to 5100 PE, while covering big amount from 5200 PE to 5500 PE strikes. This is not a good sign for the Bulls, and shows their nervousness at this stage. On the other hand, the Bears added big amount of OI from 5100 CE to 5500 CE strikes. The range from the Options table is 5000 to 5400 as of now.

For tomorrow, resistance levels for Nifty spot comes at 5150-5155 level. Above this, it will target 5180, 5205 and 5230 levels. Above 5230, lies the gap area till 5323. A breakout trade, with tight Stop and Reverse will be on above 5230. On the downside, support for Nifty spot comes at 5105 levels. Below this, it will quickly slide towards 5080-5055 levels. Below 5055, real panic will set in the market, and Nifty may just go on to break 5000 levels.

9 Aug: Nifty Spot resistance at 5155-5180-5205-5230. Support at 5105-5080-5055-4985 - www.niftypower.com

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