2 Jan - Nifty View

On the Last Day of 2011, nifty closed on a negative at the lows of day near 4620 levels. Positional traders who are in Shorts from 4700 levels can now move their stoploss near Cost and trade safe. Trend remains down till Nifty does not give a close above 4720 now. On the downside, the previous Swing lows 4550/4530 will be important supports to watch out are. Important to note is the falling trendline being formed on the Daily Charts. If Nifty takes support on this falling trendline and bounces from the lows, it will form a Bullish Wolfe Wave on Daily Charts, which can lead to a big recovery. Having said that, there is no need to Speculate and try and find the market bottoms, because if at all any recovery comes, then Long Trades should be initiated Only After Nifty gives a close above 4720.

The Nifty option OI Charts are given below:

At the start of the series, it was interesting to see good addition by both, the Bulls and the Bears. The Bulls added a good amount of 16 lacs+ OI at 4500 PE and 4600 PE strikes. Bears also added big amount of 31 lacs+ OI from 4700 CE to 5000 CE strikes. overall, at the start of the series, 4500 to 5000 is the range developing from the Options Charts. 4600 is a minor support, while 4700 and above are the resistances as of now.

For tomorrow, immediate resistance for Nifty Spot comes at earlier support of 4635/4640 levels. Staying above this, it will head for higher level resistances of 4670/4680 levels, where again the Bears are expected to become active. If somehow the bulls manage to clear this resistance zone, the the trend changing level of 4720 will be the next big resistance for Nifty Spot. on the downside, support for Nifty Spot comes around 4600/4595 levels. Below this zone, the Bears can easily push it down towards recent lows of 4555/4530 levels, and probably even lower levels. For tomorrow, Stay Short as long as Nifty stays below 4630 level.

2 Jan - Nifty Spot resistance at 4635-4670-4700-4725. Support at 4595-4555-4530-4480 - www.niftypower.com

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