On Wednesday, Nifty opened up, but then traded within a narrow band, to close near its resistance level of 5930. For all the 13 trading days of this series, Nifty Spot has traded within the zone of 5835 to 5945. Now it is once again at the top of this zone. There are two ways to approach the market right now. Traders can either trade the range until one trade Stops out, at which point they can Reverse their trades. Such traders can initiate a Short trade here with a Stop and Reverse to Long trade above 5945 Spot. The other approach is to wait for a breakout/ breakdown out of the range, and then keep a Stoploss below the Breakout level on closing basis. For example, at this point, such traders should wait for a breakout, and if it happens, initiate a Long trade with Stoploss below 5945 on Closing basis. At NiftyPower, we prefer to do the second option, and manage only intraday trades till we get a breakout.
The Nifty Option OI Charts are given below:
On the Nifty Option front, the Bulls added a small amount of 4 lacs+ Open Interest at 6000 PE strike, whereas the Bears added 6 lacs+ Open Interest at Nifty Option of 6100 CE.The Bears also covered a large amount of Open Interest at Nifty Option of 5800 CE. Overall, the range for this series remains the same. 5900 is the 50:50 level, while 5800 to 6000 is the narrow range.
For Thursday, immediate resistance for Nifty Spot comes at 5930 and 5945/5950 levels.Staying above this, a threat of Bullish breakout will be there, which can cause the Bears to panic, and lead to a short covering rally till 5985/5990 and 6020 levels. On the downside, support for Nifty Spot comes around 5905/5910 levels. Below this, the rangebound trading is expected to continue, with lower supports for Nifty coming at 5890, 5870 and 5835 levels.
20 Dec - Nifty Spot resistance at 5930-5950-5990-6020. Support at 5905-5890-5870-5850 - www.niftypower.com
P.S.:
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