27 Dec - Nifty View

On Monday, Nifty traded rangebound for most part of the day, except for the initial bog move from its support levels of 4720/4730. The Volumes were extremely low today, because of the Holiday Seasons, and hence the rangebound movement was on expected lines. The Longs that were created at 4730 are in good profits now, and Positional traders can safeguard their profits by moving the Stoploss near the lows of today on closing basis. The trend should be considered to be positive till Nifty is closing above 4700. Hence, Shorts can be opened only if and when Nifty gives a close below 4690. Till then, stay with the trend.

The Nifty option OI Charts are given below:

On such a dull day, there was a surprise addition of 28 lacs+ OI at 4700 PE and 4800 PE strikes by the Bulls. Such a big amount of OI addition, in the expiry week, is always a cause of concern. Because such additions in the expiry week always show overconfidence from one camp, this time the Bulls. If they are right, there can be a big move on the upside, but if they are wrong and panic over the next two days, there can be an equally big move on the downside. Either way, an Option Straddle can be bought to take advantage of the impending move coming. From the Bears, there was very little addition today. Infact, they covered a good amount of 16 lacs+ OI at 4600 CE and 4700 CE strikes. Overall, from the Options Charts, 4700 has become a minor support now, while 4800 is a minor resistance. 4600 to 4900 is the range.

For tomorrow, immediate resistance for Nifty Spot comes at 4790/4800 levels, above which it will head for 4850+ levels. Tomorrow, as long as it stays above 4780/4790 levels, consider the trend as up and Buy on Dips. On the downside, support for Nifty Spot comes at 4765/4770 levels, Below this, next important levels for Nifty Spot comes at 4730/4735 levels. Below 4730, Bears will become active again, and try to push Nifty towards 4690 levels, which would be a short term trend deciding level now.

27 Dec - Nifty Spot resistance at 4790-4810-4850-4875. Support at 4765-4735-4690-4640 - www.niftypower.com

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