31 Jan - Nifty View

Nifty opened Gap Up today, traded rangebound within 30 points in the first half, before taking off in the last hour to cover all of yesterday's loss. It was a great comeback from the Bulls. Interesting thing to note is the higher volumes witnessed both today and yesterday. It seems like the classic battle between the Bulls and the Bears is going on just at the 200 DMA and the falling trendline resistance level. Who will win is anybody's guess, but it will be prudent for traders not to get carried away by today's and yesterday's move. Nifty is still where it was two days ago. This is the time to wait and watch. Once a confirmed breakout/ breakdown takes place, there will be enough opportunities to trade.

The Nifty option OI Charts are given below:

If it was Bears day yesterday, today belonged to the Bulls. They added a huge 36 lacs+ OI between 4700 PE to 5000 PE strikes. However, the Bears also did not cover the huge positions written yesterday. instead they added a small quantity of 8 lacs+ OI at 5100 CE and 5200 CE strikes. Overall, after today's move, 5200 level has become a minor resistance now, from a major resistance. 5300 is the biggest resistance level for this month, and this also comes near the falling trendline resistance. 5100 is now a minor support, while 5000 and 4800 are the major supports for the series.

For tomorrow, immediate resistance for Nifty spot comes at 5210-5230 levels. The Bears will try their best stop Nifty from crossing these levels, coz after this, the next major resistance comes above 200 DMA at 5285 level. On the downside, support for Nifty Spot comes at 5180 levels, below which, the next supports are at 5160-5140 and and 5125 levels. The short term trend deciding level can be considered to be 5100 now, up from 5050 level which was given yesterday.

1 Feb - Nifty Spot resistance at 5210-5230-5260-5285. Support at 5180-5160-5140-5125 - www.niftypower.com

Nifty Tips - Nifty Future Tips and Nifty Option Tips