23 Jan - Nifty View

Nifty opened up on Friday, but declined to test its support near 5000 levels, and then the Bulls rushed in to take it up by 50 points in the last half hour. Friday was the third consecutive positive weekly closing for Nifty. It has recovered nearly 10% from the recent lows. There needs to be some pause/ consolidation before a further breakout can be seen. Also, it is near to its intermediate top of 5100. It will take a huge effort from the Bulls to close Nifty above this recent top, on back of such overbought oscillators and indicators. Hence, for those who missed this rally, it is prudent to wait a bit longer, and let some correction come in. That correction can come in the next week or after expiry. How Nifty behaves on the supports formed during such a correction, will decide whether the trend has changed or there is still more downside left. Till then, it is wait and watch.

The Nifty option OI Charts are given below:

Friday was another day which went entirely to the Bulls. They added a huge amount of 27 lacs+ OI at just the two strikes of 5000 PE and 5100 PE. On the other hand, the Bears covered a huge amount of 30 lacs+ OI at 5100 CE and lower strikes. After Friday's movement, the range for the Expiry week has narrowed down to 4900 on the lower side, and 5100 on the upside. 5000 is the battlezone level, going into the expiry week.

For tomorrow, immediate resistance for Nifty Spot comes at 5050/5055 levels. Staying above this, it will enter the strong resistance zone of 5075-5100, where the Bears are going to give stiff resistance to the Bulls. Only a close above 5100, will propel Nifty higher towards 5130/5155 levels. On the downside, support for Nifty Spot comes at 5025-5020 levels, below which, comes the support zone of 5000-4970. Only on a break and close below 4970, can the Bears hope for some respite before this expiry.

23 Jan - Nifty Spot resistance at 5055-5075-5100-5130. Support at 5020-5005-4985-4970 - www.niftypower.com

Nifty Tips - Nifty Future Tips and Nifty Option Tips