2 Feb - Nifty View

Nifty continued its upmove today also, and closed above its 200 DMA. This is a very Bullish sign and probably the start of a new Bull market, and end of the year long Bear market. However, for Long term investors, they should wait for a Higher Low to be formed on the charts, and then a Higher High to confirm the uptrend. For short term and medium term traders, the trend is already up, and only a break and close below 5100 will give the first sign of weakness. As of now, the Nifty has reached the falling trend line from Nov 2011 highs, and it remains to be seen whether it is able to cross an close above it. On the downside, 200 DMA will be the level the Bulls will try to protect now.

The Nifty option OI Charts are given below:

Both the Bulls and the Bears were in action today. The Bears added a big amount of 21 lacs+ OI at 5400 CE and 5500 CE strikes, while covering 5 lacs+ OI at 5200 CE strike. On the other hand, the Bulls have added a decent amount of 29 lacs+ OI from 5000 PE to 5400 PE strike. After todya's move, the range has shifted upwards and is now at 5100 to 5300. 5200 is a 50:50 level as of now.

For tomorrow, immediate resistance zone for Nifty Spot comes at 5260-5290 area. Nifty meets the falling trendline in this zone, and if it crosses this zone, then a rally towards 5335/5340 and 5400 levels cannot be ruled out. On the downside, support for Nifty Spot comes near the 200 DMA at 5205 level. Below this, it can test 5180/5160 in intraday. As Nifty has closed above 200 DMA, any correction towards the support levels are expected to be bought, till Nifty does not close below 200 DMA again.

2 Feb - Nifty Spot resistance at 5260-5285-5310-5335. Support at 5205-5180-5160-5140 - www.niftypower.com

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