16 Aug - Nifty View

On Tuesday, Nifty gave a small breakout above the recent highs, and closed just above it, to keep both the Bulls and the Bears in suspense during the shortened week. As long as Nifty Spot maintains this level of 5380 now, the short term trend should be considered up, and Positional Longs should be opened. There are two more days left in this week, which will provide further clarity on the breakout trade. There are few level to watch out if Nifty is unable to maintain above 5380. First is around 5345 Nifty Spot, which is a horizontal support. Any declines towards this level should be treated as normal and can be a good opportunity to add positions to the Long trade. Below that, next important level is around 5295 Spot, which is the recent low. A close below this level can take Nifty to close the gap zone at 5260-5215. Hence, we will treat 5295 as the trend deciding level as of now, which will be revised after looking at the next two days movement in Nifty.

The Nifty Option OI Charts are given below:

On the Options front, the Bears added a good quantity of 16 lacs+ OI at 5300 PE and 5400 PE strikes. On the other hand, the Bulls added a small quantity of 8 lacs+ OI at 5500 CE and 5600 CE strikes. Overall, the Option charts are also turning slightly Bullish along with the movement in Nifty. Strong resistance has shifted from 5400 to 5500, as there has been covering in 5400 CE by the Bears, and at the same time, addition at 5400 PE by the Bulls. Also, 5300 has now become a strong support level, with more than 80 lacs+ open interest at 5300 PE strike.

For Thursday, immediate resistance for Nifty Spot comes at 5380/5390 levels. Staying above this, the Bulls will have an upper hand, and will try to take Nifty toards higher level resistances of 5405/5445. On the downside, support for Nifty Spot comes at 5345/5350 level. As given earlier, any declines towards these levels should be treated as a good buying opportunity. Below this, the Bears will try to push it lower to test support levels of 5320 and 5295. A close below 5295 will change the Short term trend from Up to Down.

16 Aug - Nifty Spot resistance at 5385-5405-5445-5490. Support at 5345-5320-5295-5260 - www.niftypower.com

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