22 Nov - Nifty View

Nifty opened down again today, broke the lows made on Friday, and closed below 4800 levels. Sell on Rallies was the mantra. However, the rallies have not come, so that trade plan could not be followed under present market conditions. For those who have missed the train, better let it go and wait for Fresh opportunity. The trend remains Down and hence Buying is not an option. On the other hand, Fresh Shorts will have to keep a large stoploss above 5000 levels. Such a large stoploss does not give a good Risk: Reward Trade. Hence, it is better to wait for a better opportunity to open fresh Positional Shorts. We might get such an opportunity this week. Till then, trade intraday, by Selling on Rallies.

The Nifty Option Open Interest charts are given below:

As per the Option Charts, the Bulls have their back to the walls now. The Bears continue to add huge Open Interest while the Bulls are covering their earlier written positions. Once again, a huge amount of 36 lac+ OI was added from 4700 CE to 4900 CE strikes. The Bulls on the other hand, added a small amount at 4700 PE and below strikes, and mostly covered at 4800 PE and above strikes. The range as per the Option Charts is 4700 to 5100 as of now. Although Nifty closed below 4800, the open interest at 4800 PE is more than 4800 CE. 4900 and 5000 are the minor resistance levels.

For tomorrow, immediate resistance for Nifty Spot now comes at 4810/4815 levels. If it manages to sustain above these levels, then it will attempt higher levels of 4840-4865 and 4880. Crosing the zone of 4880/4905 will be very difficult now, however, if it does, we might also see a recovery till 5000 levels on Nifty. On the downside, support for Nifty Spot comes at todays low of 4765/4760 levels. Trading below this, it will head for the recent lows of 4720/4725. Below 4720, no real supports exists, and it will be interesting to see where the fall stops.

22 Nov - Nifty Spot resistance at 4815-4840-4865-4880. Support at 4785-4760-4720-4675 - www.niftypower.com

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