16 Feb - Nifty View

Nifty finally broke out after seven days of consolidation, and made another 100 point upmove. It is now within striking distance of the range of 5600 to 5700, which was an important reference point for entire 2010. This 100 point range was visited multiple times last year, and may prove to be the next big resistance for Nifty. Crossing and closing above 5700 should open the floodgates for new all time highs. But right now, it is time to be cautious with Longs, as the entire world is turning Bullish. Remember, when the last Bear turns a Bull, its time to Sell. However, instead of predicting and speculating, it is better to follow the market. Hence, those in longs can book out, but it not the right time to enter Fresh Shorts right now. That signal will come only below the opening level of today, which is 100 points down as of now.

The Nifty option OI Charts are given below:

On the Options front, the Bears were massacred today. The Bulls added a Huge 32 lacs+ OI at 5500 PE strike, and another huge 15 lacs+ at 5600 PE strike. On the other hand, the Bears covered a huge amount of 37 lacs+ OI at 5400 CE and 5500 CE strikes. The Option Charts look too Bullish for comfort now. In one day, the level of 5500 has gone from a major resistance to a 50:50 level, and there is no real resistance ahead of Nifty now. On the downside, there is support at each strike at and below 5400 level.

For tomorrow, immediate resistance for Nifty Spot comes at 5545 levels, above which, it will head for 5575-5590 and 5620 levels. On the downside, support for Nifty Spot now comes at 5495 and 5510 levels. Below these, todays Gap support of 5460 will come into play. All dips will be bought till Nifty stays and closes above this level now. If however, it closes below this level, then it can signal the start of a short term correction. hence, 5460 should be the stoploss for all positional longs now.

16 Feb - Nifty Spot resistance at 5545-5575-5590-5620. Support at 5510-5495-5460-5425 - www.niftypower.com

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