18 Jan - Nifty View

Nifty made another Trend Day today, after conquering its strong resistance of 4920 in the opening itself, and closed at the highs of the day, near 4970 level. The move that it is making is similar to the one it made when it broke out on 3rd Jan. This rally of 300 points was done in 3 Trend Days. In the remaining 9 trading days, we have seen choppy trades within a narrow range. Going forward, the next major resistance for Nifty Spot comes at the recent top near 5100 levels. Immediate support now comes at todays low at 4905 level. The ocsillators on Daily Charts are now reaching overbought levels. It will be difficult for the Bulls to cross this major resistance with such overbought oscillators. Hence, it is time to be cautious with Longs now.

The Nifty option OI Charts are given below:

The Options Charts finally had a big action day, after the lack luster show of past week. It was a day that belonged to the Bulls, who added a huge amount of 50 lacs+ OI from 4800 PE to 5100 PE strikes. At just the two trikes of 4900 PE and 5000 PE, the OI addition was 41 lacs+. The Bears on the other hand, ran for cover today, covering 23 lacs+ OI from 4700 CE to 5000 CE strikes. The only addition worth mentioning by the Bears was done at 5100 CE strike, where they added a huge quantity of 12 lacs+ OI. Todays Option charts have shown the overconfidence of the Bulls. Till the time Nifty now trades above 4900, these Bulls will be comfortable. However, if Nifty falls and close below 4900 now, then these writers can panic and lead to a swift downmove. Hence, till Nifty stays above 4900 now, stay Long.

For tomorrow, immediate resistance for Nifty Spot comes at 4975-4980 levels, above which, it will attempt next resistance zone of 5020-5050 levels, where again, the Bears are expected to give some stiff resistance. On the downside, support for nifty Spot comes at 4940/4945 levels. Below this, 4920 and todays lows of 4905 can be tested again. If falls below 4905, then it can set panic among the Put Option writers of today, and can lead to a swift fall.

18 Jan - Nifty Spot resistance at 4980-5020-5050-5085. Support at 4940-4920-4905-4840 - www.niftypower.com

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