On Friday, Nifty confirmed the Sell signal formed on Thursday, by forming a Lower Low and closing below 5150 Spot, as well as the 200 DMA. Traders in Short position can now keep a stoploss at 5150 on closing basis to lock in the profits. This downmove has come after a long period of consolidation, and should bring some momentum on the downside now. The falling trendline joining the recent lows is the last hope for the Bulls. The support for this trendline comes around 5000 level as of now.
The Nifty Options OI Charts are given below:
On the Options front, there was a huge addition of 15 lacs+ OI at 5000 PE strike, and a equally huge covering of 12 lacs+ OI at 5200 PE strike. Only if and when Nifty moves above 5200 now, would this downtrend be considered to be over. 5000, as given before also, is the next major support. For the Bears, there was a huge addition of 38 lacs+ OI at the three strikes of 5100 CE to 5300 CE. With this, they have built some solid resistances on the way up for Nifty. Overall, 5000 to 5300/5400 is the developing range for Nifty for this month.
For tomorrow, immediate resistance for Nifty Spot comes at 5090/5095 level. Above this, the Bulls can hope for a relief rally towards 5120-5155 levels, which will be good opportunities to Sell again. On the downside, support for Nifty Spot comes at 5070 and then at 5040/ 5000 levels. The level of 5000 can provide some support to Nifty. Below that, 4950/4960 can come quickly.
7 May - Nifty Spot resistance at 5095-5120-5155-5190. Support at 5070-5040-5000-4955 - www.niftypower.com
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