21 May - Nifty View

Nifty closed the week on a positive note, by forming a Bullish Engulfing candle on Daily charts. It is similar to the one formed on 15th May, which failed as there was no follow-up move. However, there are other positive indications for the Bulls going forward, inspite of the nervousness in global markets. Friday's upmove was on rising volumes, which is a good sign. Also, Nifty closed above the falling breakout line, which should now again act as a support on declines. Add to that, oscillators like Stochastics and RSI are reaching oversold levels. Hence, a relief rally may just be around the corner. However, the Lower Low Lower Highs formation is continuing, and till this is convincingly broken, this downtrend can resume anytime. 4930/4950 is the immediate resistance line, a close above which can lead to a short term trend change in Nifty. Hence, all positional shorts can Stop and Reverse their trades above this level.

The Nifty Option OI Charts are given below:


There was not much addition of OI done by either the Bulls or the Bears on Friday. The Option charts show a sort of indecision between the two levels of 4900 and 5000 as of now. 4800 has emerged as a major support, while 5100 is the immediate major resistance ahead.

For tomorrow, immediate resistance for Nifty Spot comes at 4920/4930 level. If it manages to stay above this, it can lead to a short covering rally for higher levels of 4955/4980 and 5020. On the downside, support for Nifty Spot should now come at 4880/4890 level. Below this, it can slide further towards 4855/4850 level. A move below 4850 will again bring downward momentum.

21 May - Nifty Spot resistance at 4925-4955-4980-5020. Support at 4885-4850-4820-4790 - www.niftypower.com

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