5 Oct - Nifty View

Festival Special Offer - 50% Off on Monthly Subscription of All Packages!!


In Yesterday's Nifty View, 4870 to 4905 was given as the toughest resistance for Nifty, and it was recommended to short it on all rises till this level was crossed. The high it made today was 4869.75. On the way down, nifty has formed a resistance zone between 4830 to 4850 level. This would be the immediate resistance point in case of any bounce. Downside, the August lows near 4720 were supported today. However, in a falling market, always look for Resistances and not the Supports. Only when the resistances are crossed, should we look for these resistances to become supports, and Buy with Stoploss below them. For tomorrow, the levels to watch on upside will be at 4770 and 4830.

The Nifty option Open Interest charts are given below:

On such a down day, one would expect some big addition from the Bears. And they did exactly that, by adding 37 lacs + OI from 4700 CE to 5300 CE strikes, the maximum addition being at 4800 CE and 4900 CE. The Bulls covered nearly 5 lacs at 4900 PE, but apart from that, there was no major covering from the Bulls. Infact, some addition was also seen from the Bulls at 4700 PE. Apart from this, there is an unusual addition at 4300 PE, which has been the trend for the past two months. Overall, the Options Charts do not look as Bearish as the Price Action is telling us. 4800 PE still has much more OI than 4800 CE, indicating the bulls have not started panicking yet. Either we will see a recovery from here (maybe after making a new low), or the Bulls will panic once 4700 breaks, and start covering their positions at 4800 PE. Hence, 4700 and 4800 are the next most important levels to watch, as per the Option Charts.

For tomorrow, immediate resistance for Nifty Spot comes at 4790 level. If manages to stay above this, it can head towards 4825/4830, where again selling pressure will emerge. On the downside, support for Nifty Spot comes at 4750 and then major support is at recent low of 4720. How Nifty reacts at this level, will decide the next few days trend for the market.

5 Oct - Nifty Spot resistance at 4770-4795-4825-4860. Support at 4750-4720-4690-4660 - www.niftypower.com

Visit here for Nifty Tips

Do not forget to see our Festival Special Offer on www.niftypower.com