2 Nov - Nifty View

On Tuesday, Nifty opened Gap Down on negative global cues, and then had a steady decline towards 5238, and finally closed near 5255/5260 levels. The Global News is turning bad at a crucial juncture when Nifty is near its 200 DMA. A lot of Shorters, who were trapped in this upmove, should be a happy lot now. But whether this is a golden opportunity to go long OR an opportunity to Go Short on Breakdown? Our take is - forget about it. Just keep the levels of 5230 and 5170/5150 in your mind. Break of 5230 will be a point of exiting longs, 5170 of initiating shorts, and 5150 a point of adding to the Shorts. In short, stay long above 5230 and stay short below 5170. Leave the rest to Mr. Market. Do not get into the trap of those who keep predicting the next Big Fall or the next Big Rally. Bullish and Bearish reasons will be there always. We should be seeing the reason that Mr. Market is taking, rather than the one we Want to See.

The Nifty option Open Interest charts are given below:

The Bears seem to be slowly gaining confidence. They added 9.5 lacs+ OI at 5300 CE strike. But other than that, there was no significant addition of Open Interest by them at other strikes. The Bulls also, primarily added Open Interest at 5100 PE strike, and did not do much at other strikes. After today's move, the level of 5300 has become a minor resistance now. Combining this with our levels, the level of resistance are 5310 and 5325/5330. The level of 5200 is a minor support, and 5100 and 5000 are the good supports. The overall range remains 5000 to 5400.

For tomorrow, immediate resistance for Nifty Spot comes at 5260 and 5290 levels. Above these, Nifty Spot now faces major hurdle at 5310/5325 before the 200 DMA. A move past 5325 can now trigger fresh rally towards 5365 and 5405+ levels. On the downside, support for Nifty Spot comes at 5230/5235 levels. Below these, the Bears will start taking control from the Bulls, and a test of strong support zone of 5170/5150 will be on the cards. Break and close below 5150 will lead to some panic selling in the market.

2 Nov - Nifty Spot resistance at 5260-5290-5310-5325. Support at 5230-5190-5170-5150 - www.niftypower.com

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