2 Dec - Nifty View

Nifty opened with a huge Gap Up today, near 5000 levels, but could not hold on to the big gains and closed near 4930 level. Today's daily bar has given mixed signals, as it has held on to the Gap created, however, it has also made a Selling Tail, by failing to hold on to the big gains of the morning. A move below 4910/4900 now can go on to fill the Gap till 4850/4840 levels. On the other hand, if the lows of the day are held, then a move past 5015/5030 will keep the Bulls raging. Hence, it is time to Wait and Watch right now, till further clarity emerges. Also to be noted is , that on its way down from 5400, Nifty had very little volumes traded between 4900 and 5000/5015 levels. Nifty can spend some more time consolidating in this 100 point range, and then the breakout/ breakdown will be more reliable.

The Nifty Option Open Interest charts are given below:

The Option writers also seem to be confused as of now. There was addition of OI by both the Bulls and the Bears at and above 4900 strikes today. However, both of them covered OI at 4800 and lower strikes. This is quite strange, and may be due to some Hedged Option Strategies being adopted by the traders. From the Options Charts, 22 lacs+ OI was added by the Bulls at 4900 PE and 5000 PE strikes. The Bears also added 16 lacs+ OI at 5000 CE and 5100 CE strikes. From the beginning of this series, the Bears have been quite active at 5100 CE strike. Hence, 5100/5130 should be considered the maximum for this rally, if it continues into tomorrow and next week. On the downside, 4700 is now the biggest support for this series.

For tomorrow, immediate resistance for Nifty Spot comes at 4940 level. Sustaining above this, it will again target 4960/4980 levels. The biggest resistance above 4980 will be at 5015/5030 levels. If Nifty gives a breakout from these levels, then it can target 5100+ levels, where again the Bears will become active. On the downside, support for Nifty Spot comes at 4910/4915 levels. Below this, it will slide towards 4880 and 4850 levels. Some buying support will come near 4850 levels, as the gap will be filled at that level. Below that, fresh downmove can start. Hence, 4850 should be the stoploss for any Positional Longs on closing basis.

2 Dec - Nifty Spot resistance at 4940-4980-5015-5030. Support at 4910-4880-4850-4805 - www.niftypower.com

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