27 Jan - Nifty View

Nifty had a quiet Expiry on Wednesday, with a range of 45 points. It closed just above its resistance band of 5130-5150. Now at the start of the February Series, Nifty is just below its strong resistance of 200 DMA. Also, it has now again reached the falling trendline connecting the highs from November 2010. In the past year, it made several attempts to breakout above this trendline, but failed and had significant declines after that. If it manages to close and sustain above this trendline now, it will indicate an end to the Bear cycle that started in November 2010, and maybe, the start of a new Bull run. It has already made a Higher High, and on any declines, it is expected to make a higher low also. The only concern at this point of time are the Overbought Oscillators on Daily Charts. Hence, there may be a cap to the upside, at least for the coming 1-2 weeks.

The Nifty option OI Charts are given below:


Feb Series has atarted with a good amount of action on the options front. There was a huge amount of 40 lacs Puts added by the Bulls from 4600 PE to 5100 PE strikes. The Bears, on the other hand, were more restrained in their activity. The only significant amount of OI by the Bears was between 5000 CE to 5200 CE strikes, where they added 19 lacs+ OI. At the start of the Feb series, 4800 to 5200 is the range developing, with the level of 5100 as the battleground level between the Bulls and the Bears.

For tomorrow, immediate resistance for Nifty Spot comes at 5175-5180 levels. Above this, the momentum will stay with the Bulls, and they will attempt to take it towards its next strong resistance zone of 5210-5230, where the Bears have their best chance to stall this upmove. On the downside, support for Nifty Spot comes at 5130 levels, Below this, it will decline towards 5110-5085 and 5050 levels. 5050 will be a short term trend deciding level for the Nifty.

27 Jan - Nifty Spot resistance at 5180-5210-5230-5265. Support at 5110-5085-5050-5025 - www.niftypower.com

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