4 Jan - Nifty View

Nifty had a trend today, after the Bullish Hammer formed on Daily Charts yesterday. It cleared its resistance zone of 4690-4720 in the morning trades, and thereafter had a continuous upmove, to close near its next strong resistance of 4760. Now, as long as it stays above the 4690/4720 zone, consider the trend as up only. Traders who initiated long above 4720 can keep a stop and reverse at 4690.

The Nifty option OI Charts are given below:

The one Strike that stands out in today's Options Charts is 4700 PE. Huge addition of 18 lacs+ OI by the Bulls was done at this strike. Apart from this, the Bulls also added OI from 4500 PE to 4800 PE strikes. From the Bears, the was big amount of covering that was done at 4700 CE strike. The action at 4700 CE and 4700 PE gives a very Bullish picture as of now. We can wait for a follow-up action in the coming days. But the Bulls seem to be determined to form a support at this level as of now. 4500 to 5000 is the broad range as per the Options Charts. 4600 to 4900 is a narrower range, with 4700 as a minor support, and 4800 as a minor resistance.

For tomorrow, immediate resistance for Nifty Spot comes at 4775 levels, above which, it will again test the recent highs near 4800 level. The Bears are expected to give stiff resistance at 4800 to the Bulls. However, if that level is breached, we may see another short covering rally for 4850/4870 and 4920 levels. On the downside, support for Nifty Spot now comes at 4750 levels. Below this, the support of 4720/4725 can be tested again. Consider the trend as up only till Nifty stays above 4720. Below 4720, 4690/4695 can be tested. The zone of of 4690-4720 is a no trading zone. Below 4690, Bears will have an upper hand, and this breakout will can be considered to be a failed breakout.

4 Jan - Nifty Spot resistance at 4775-4800-4850-5875. Support at 4750-4725-4690-4640 - www.niftypower.com

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