On Wednesday, Nifty once again traded in a narrow band, and closed near 5900 level, to form another Doji on Daily Charts. Some cooling off was expected this week, after he run-up in Nifty last week. However, Nifty has held on to its gain so far this week, ahead of the FDI Voting News. The lower volumes that we have seen over the past few days indicates that the traders have been waiting for the News to get out of the way, before building any positions. Now, after the event is over, it remains to be seen whether Nifty continues its upmove, or whether it becomes a "Sell the News" kind of trade, and Nifty will correct from here, to test its Support levels. Immediate levels to watch out on the downside will be 5880/5870 zone. Till Nifty is staying above this level, even aggressive traders should not be thinking of any Short trade. However, if Nifty breaks this zone, then a slide towards 5825/5815 and 5790/5770 is possible. How the Bulls support these levels, will give further clarity on the inherent strength of the market. As of now, Aggressive traders should wait for a Short Opportunity below 5880/5870. Till then, it remains a Buy on Dips.
The Nifty Option OI Charts are given below:
On the Options front also, the volumes have been on the lower side. The Bears were mainly active at 6200 CE strike, where they added 8 lacs+ Open Interest. On the other hand, the Bulls added small quantities of Open Interest at 6000 PE and below strikes. Overall, 6000 remains the biggest resistance this series, with Open Interest crossing 80lacs+ at 6000 CE strike. 5900 is the 50:50 level as of now. For supports, the Bulls also seem to be waiting for a downmove to add Open Interest. As of now, 5800 and below can be called as Minor Support levels. But this picture is sure to change, when Nifty decline towards those levels, and the Bulls start adding Open Interest
For Thursday, immediate resistance for Nifty Spot comes at 5900/5905 level. Staying above this, the Bulls are expected to remain in control, and take it to higher level resistances of 5930/5950 and 5985 level. On the downside, support for Nifty Spot comes at 5890 and 5870 levels. As long as it stays above these levels, the Bulls will have a chance to bounce back. Below 5870, the Bears will start to dominate, and they can take Nifty lower to test supports of 5850 and 5825/5815.
6 Dec - Nifty Spot resistance at 5905-5930-5950-5985. Support at 5890-5870-5850-5820 - www.niftypower.com
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