12 Jan - Nifty View

Nifty consolidated after the breakout of yesterday, and formed a Doji on Daily charts. It is behaving similar to what it displayed after the Trend Day of 3rd January. After a big move up, the follow through momentum is missing, and that is a cause of concern. However, instead of speculating, prices show an uptrend, and till it remains above 4770, traders should look to go Long only. Below 4770, it will be a different story, and we will analyze that only if and when Nifty gets there. Upside strong resistance zone to watch out is the 4920-4960 zone and a minor resistance near todays high of4875/4880.

The Nifty option OI Charts are given below:

After a relatively quite first half of January, Option writing activity again seems to have picked. On such a rangebound day, the Bulls added nearly 16 lacs OI from 4600 PE to 4900 PE strikes. On the other hand, the Bears also added a decent 14 lacs+ OI from 4900 CE to 5100 CE strikes, while covering a small amount at 4800 CE and below strikes. Overall, 4800 has now become the battleground level between the Bulls and the Bears. 4700 and below are the strong supports as of now, with each of the strikes of 4500 PE, 4600 PE and 4700 PE nearing 70 lacs in Open Interest. 5000 and above are the resistance levels.

For tomorrow, immediate resistance for Nifty Spot comes at 4875 and 4895 levels. Above this, Nifty should target its next strong resistance zone of 4920-4960. Crossing above this zone will be the next big hurdle for the Bulls. On the downside, support for Nifty Spot comes at todays low of 4840 levels. Below this, Bears will have an upper hand, and they will try to push Nifty downs towards 4810/4790 and 4770 levels. 4770 should offer strong support for the Nifty on closing basis. If however, the Bears manage to close Nifty below this level, then this breakout can be considered a failed breakout, and Positional Shorts can be opened.

12 Jan - Nifty Spot resistance at 4875-4895-4920-4960. Support at 4840-4810-4790-4770 - www.niftypower.com

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