21 Dec - Nifty View

On Tuesday, Nifty had a dramatic sell-off, after making an intraday high near its strong resistance zone of 4630/4640. It closed just near its recent support level of 4550, after making an intraday low near 4530 levels. The trend remains down and todays high of 4630/4640 would be an important resistance level, going forward. Above this, the next major resistance comes more than 100 points up at 4760. Hence, on any technical bounce from here on, given the oversold nature of RSI and Stochastics, Positional Shorts can be built with Stop and Reverse above 4760 Spot. Above 4760, this correction would be considered to be over for the time being, and levels of 4920 can be tested on Positional basis.

The Nifty option OI Charts are given below:

It was Bears Day out today, who finally decided to add some OI at various strike levels. A huge 37 lacs+ OI was added by the Bears between 4500 CE to 4800 CE strikes. On the other hand, the Bulls covered nearly 13 lacs OI at 4600 PE and 4700 PE strikes. After today's addition, the support level as per the Option Charts remains at 4500, although it has been weakened today. Resistances for nifty comes at 4800 and above level, which corresponds to 4760 given earlier. In between, 4600 and 4700 are the 50:50 levels, and Nifty can give wild swings like today near between these levels, as both Bulls and Bears fight for supremacy near these levels.

For tomorrow, immediate resistance for Nifty Spot comes at 4570 and then at 4595/4600 levels. If manages to cross these, then once again, the strong resistance zone of 4635/4640 will be tested. Above 4640, there can be a mini breakout, and Nifty can reach 4700+ levels, where again the Bears will become active. On the downside, support for Nifty Spot comes at todays low of 4530 levels. Below this, there is no major support till 4450/4440 zone, and it remains to be seen, where Nifty will find support, if it falls below 4530.

21 Dec - Nifty Spot resistance at 4570-4600-4640-4675. Support at 4530-4485-4460-4440 - www.niftypower.com

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