6 Feb - Nifty View

Nifty had another up day on Friday. With that, it ended a 5th consecutive positive week. It has also comfortably closed above 200 DMA and the falling trendline resistance. This resistance line has been crossed after more than a year. It had earlier formed a higher high on Daily Charts, and most probably, on a correction, whenever it comes, will form a Higher Low. All indication are there for a Long Term Trend Change happening. This is a transitioning phase, and it is going to be the most difficult for traders, mentally and emotionally. Till the time it stays above 5200 now, consider the Short Term trend as up. For investors and Medium/ Long Term traders, the Buy On Dips time has come, with a stoploss at 4700 level for Nifty. For short term traders, Stoploss for any fresh Longs should be placed at 5200 level on a closing basis.

The Nifty option OI Charts are given below:

The Bears have been really pushed back by the Bulls. Friday was no different. The Bulls added a huge amount amount of 22 lacs+ OI at 5200 PE and 5300 PE strikes. On the other hand, the Bears covered a big quantity of OI from 5200 CE to 5400 CE strikes. The only addition done by the Bears was a small addition at and above 5500 CE strikes. Overall, in the Options Charts, 5300 CE to 5500 CE strikes, all have nearly equal OI of 45 lacs to 50 lacs. In terms of support, 5000 PE has the maximum OI, and it will be the major support for this series. Immediate supports lies at 5200 and 5100 levels, while 5300 is the 50:50 level as of now.

For tomorrow, immediate resistance for Nifty Spot comes at 5335/5340 levels. Above this, Nifty can straightaway head towards 5400/5405 levels, with a minor resistance at 5365 level. On the downside, good support for Nifty Spot comes at 5285/5290 levels. Till Nifty stays above this level, Bulls will have an upper hand. Below 5285, 5250/5255 will be the next good supports for Nifty Spot. Only if Nifty falls below 5250, can the Bears hope for a retest of 200 DMA.

6 Feb - Nifty Spot resistance at 5340-5365-5405-5445. Support at 5285-5250-5225-5205 - www.niftypower.com

Nifty Tip - Nifty Future Tip and Nifty Options Tips