5 Sep: Nifty View

Nifty posted good gains last week, rallying from 4749 to end nearly 300 points up. This upmove can be a technical bounce or the start of a new upmove. If it is the start of a new upmove, traders can afford to wait for a confirmation to the trend change. There will be plenty of opportunities to go long. However, if one wants to go short, this might be a golden opportunity. Nifty has rallied in a truncated week. Real trend will be decided this week. Hence, keep close watch on the important support zones formed on the way up. If these fail to hold, the downtrend would resume.

The Option OI Charts are given below:


There was unusually high addition of OI at OTM strikes of 5400 CE and 4400 PE. We will ignore them for the time being (they can be the broad range for this series). Apart from that, there was big addition at 4700 PE and 5000 PE strikes by the Bulls. From the Bear camp, nothing much is happening for the past few days. They are playing a wait and watch game. We will have to wait for them to take some action on a Down day, to be more clear on the developing range. For now, 5100 and above are the resistances. 4800 and below are the supports. 4900 is a minor support, while 5000 is the battlezone level between the Bulls and the Bears.

For tomorrow, immediate support for Nifty Spot comes around 5010-5015 levels. Below this, the Bears can drive Nifty down towards 4990/4980 levels. If 4990 breaks, important supports on the downside will come at 4950 and 4925 levels. Below 4925, this upmove will be in question. On the upside, resistance for Nifty spot comes at 5060/5065 levels. If it manages to stay above this, it will move towards higher resistance levels of 5080-5110 and 5150 levels.

5 Sep: Nifty Spot resistance at 5065-5080-5110-5150. Support at 5010-4990-4950-4925 - www.niftypower.com

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