7 Dec - Nifty View

On Thursday, Nifty opened up, moved down swiftly to make an intraday low of 5838,, and then made a remarkable recovery, to close near 5930 level. It broke our reference level of 5880/5870 in intraday and went nearly 40 points down, but closed well above it. Positional traders, who would have taken aggressive Shorts, below 5880/5870, and have not exited them, can now keep a Stoploss around 5950 Spot level. In Yesterday's Nifty View, it was given that how Bulls react at the support levels below 5880, will give more clarity on the inherent strength of the market. The Bulls have clearly shown the strength of this rally. The only solace for the Bears at this moment is the huge built up in Open Interest at 6000 CE strike, and a Hanging Man pattern on Daily Charts. This pattern needs a follow-up move tomorrow, to be of any relevance. Hence, we will not consider it as of now, and consider it only if Nifty Spot starts trading below 5900/5880 again. Till then, the uptrend continues, and Shorts should keep a strict Stoploss.

The Nifty Option OI Charts are given below: 

On the Options front, there was not much activity today by both the Bulls and the Bears. The Bulls added a small amount of Open Interest at 6000 PE strike, while the Bears added a small amount at 6300 CE strike. Overall, the Option Charts remain the same, with 5900 being the 50:50 level for this series as of now. 6000 is the toughest resistance. Supports lie at the 5800 and below levels, however, the Open Interest at these strikes is not enough to call them as major supports as of now.

For Friday, immediate resistance for Nifty Spot will come at 5930/5950 levels. Stayinga bove this, the next big resistance for Nifty Spot will come around 5985/5995 levels. If the Bulls manage to sustain Nifty above these levels, then we can see another fierce short covering rally, when the 6000 CE writers start covering their positions. On the downside, support for Nifty Spot comes at 5910/5885 levels. Till Nifty trades above these levels, momentum will favor the Bulls, However, another break below these levels tomorrow can lead to a bigger fall this time.

7 Dec - Nifty Spot resistance at 5930-5950-5990-6020. Support at 5905-5890-5870-5850 - www.niftypower.com

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