15 Dec - Nifty View

Nifty opened down today, and traded with volatility to make an intraday high of 4839, near our strong resistance zone of 4840/4850, before sliding and closing near the lows of day. It is still trading within the range. A close below 4720 or above 4840 should be considered as breakout points to initiate fresh Positional trades now. Till then, intraday trades with tight stoplosses should give better results.

The Nifty Option Open Interest charts are given below:


The action was once again limited to just one strike, that of 4800 CE, where an addition of nearly 8 lacs was done by the Bears. Apart from that, there is hardly any addition worth talking about. From the OI Charts, important to see an OI of nearly 90 lacs at 4700 PE and 5100 CE. Since 5100 CE is quite far off, keep in mind the OI at 4700 PE for the time being. If this level breaks and Nifty closes below 4700, it will be very interesting to see how the writers of these Puts react. If these guys panic, then we can see a big fall below 4700. Hence, all Long Trades should strictly have a stoploss at 4700 on closing basis. Till then, assume that this level will Hold, which is obvious as per the Options Data.

For tomorrow, immediate resistance for Nifty Spot comes at 4780/4785 levels. Above this, it will again target its resistance zone of 4815 and 4840/4850. If somehow manages to cross above 4840/4850 zone, we can see panic covering from the Bears. On the downside, support for Nifty Spot comes at 4745/4750 levels. Below this, the all important levels of 4720 will come into picture. A break of 4720 will be the first indication of a breakdown, and Positional shorts can be initiated with a Stop and Reverse of 4760.

15 Dec - Nifty Spot resistance at 4780-4815-4845-4880. Support at 4745-4720-4690-4640 - www.niftypower.com

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