21 Feb - Nifty View

Nifty had another "Up" week last week, and closed near the highs of the week. It left two gaps in the process, which may be filled in the coming weeks, as the structure does not look like a "Runaway Gap", and more like an "Exhaustion Gap". Any which way, these Gaps have given us some important levels, breach of which can lead to short term downmove in the Nifty. The first indication of this will come if Nifty Spot declines below the 5530/5520 zone. This should now be the stoploss for all Longs on closing basis. On the upside, 5620/5630 is expected to provide some stiff resistance, above which, 5700+ levels can come.

The Nifty option OI Charts are given below:

On the Options front, the same story is repeated everyday. The Bulls continue to add huge positions in Put Options, while the Bears keep covering at lower strike Call options. Friday was no different. The Bulls added a huge amount of 27 lacs+ OI at 5600 PE strike alone. The Bears covered nearly 15 lacs OI at 5400 CE and 5500 CE strikes. The Option Charts look too Bullish for comfort now. There is no real resistance ahead of Nifty now. On the downside, there is support at each strike at and below 5500 level.

For tomorrow, immediate resistance for Nifty Spot comes at 5590/5600 levels, above which, the strong resistance of 5620/5630 will be tested. A close above 5630 will set it up for still higher targets 5700/5720, and probably a rangebound move between 5600 and 5700 after that. On the downside, support for Nifty Spot comes at 5530/5520 zone. A close below 5520 will set up Nifty for a short term correction towards 5480/5460 and 5425 levels.

21 Feb - Nifty Spot resistance at 5595-5625-5660-5690. Support at 5525-5480-5460-5425 - www.niftypower.com

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