On Friday, Nifty opened up near 5690 level, above its crucial resistance levels of 5660, and after making an intraday high near 5711 level, closed near the opening level, making a Doji on Daily Charts. Positional shorts should be closed, as Nifty opened above our level of 5660. However, it is still not time to open Positional Longs, as Nifty has re-entered in the trading zone zone of 5630 to 5730/5750. Normally, a failed breakdown is expected to bring a trending move in the opposite direction. However, a Doji indicates indecisiveness among traders. Hence, it should be confirmed whether to take this move as a false breakdown or a range extension. Any Postional Longs should be attempted by traders only if Nifty Spot manages to breakout above 5750/5755 level. Till then, it is better to trade intraday with small stoploss and targets.
The Nifty Option OI Charts are given below:
On the Options front, the Bulls made a good recivery on Friday. They added a huge quantity of 15 lacs+ OI at the two strikes of 5600 PE and 5700 PE. On the other hand, the Bears added 14 lacs+ OI at 5900 CE and 6000 CE strikes, but also covered 8 lacs+ OI at 5700 CE strike. Overall, 5700 has now clearly become the 50:50 level for this series also, just like last series. 5600 has once again emerged as the strongest support level from the Option Charts. Below this, the next support level comes at 5300. On the upside, major resistance level is at 5900 level. 5800 can be only be treated as a minor resistance as of now from the Option Charts.
For tomorrow, immediate resistance for Nifty Spot comes in 5715-5730 zone. If it manages to stay above this zone, then the Bulls will try take to take it higher towards next resistance level of 5750/5755. Above 5755, we can see another short covering rally in Nifty, which can take it to the recent high, and higher. On the downside, support for Nifty Spot comes at 5690/5685 Spot. Below this, lies the Gap that Nifty left on Friday. If Nifty Spot stays below this level, the Bears will have an upper hand, and Nifty can slide towards 5655/5645 and 5625 levels. Hence, it is better to avoid longs if Nifty Spot trades below 5685 on Monday.
5 Nov - Nifty Spot resistance at 5715-5730-5755-5790. Support at 5685-5660-5645-5625 - www.niftypower.com
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