On Monday, Nifty opened slightly up, and traded rangebound during the day, with a negative bias, but recovered in the end to close mildly in the positive. There is a clear positive divergence in RSI on daily charts, which was formed when Nifty made its low near 5605 Spot level on Expiry day. Although it is a Buy Signal, to be confirmed by a move above the resistance zone of 5720/5730, but overall, the view still remains Bearish. Nifty has formed a Lower Low on short term charts, and may be, is in the process of forming a Lower High. This Bearish View will change only when Nifty is able to take out its recent high of 5970 on closing basis. Hence, all Positional trades on the long side, should be of smaller targets, till the time Nifty crosses its recent high. One such trade which is lurking around the corner is a Buy on breakout above the 5720/5730 zone. Aggressive traders can initiate a Buy if this breakout happens, with a Stop and Reverse below Monday's low around 5675. Above this zone, the next significant resistance zone for Nifty Spot lies 100 points up at 5820/5850 levels.
The Nifty Option OI Charts are given below:
On the first trading day of the series, both the Bulls and the Bears added Open Interest in Nifty Options, as expected. The Bulls were most active at 5500 strike of Nifty Put. The Open interest in 5500 PE stands at 73 lacs+ at the start of the series itself, indicating that it will be a very strong support for this series. On the other hand, the Bears added huge quantity of 21 lacs+ Open Interest at Call Options of 5600 and 5700. For the Bears, there is no significant resistance which is formed till now. More clarity will emerge as the series progresses. 5600 is the 50:50 level between the Bulls and the Bears as of now.
For Tuesday, immediate resistance for Nifty Spot comes around 5720 level. Staying above this, the Bulls will have an upper hand, and they will try to push Nifty higher towards 5770 and 5795 levels. Above this, lies the next strong resistance zone of 5820/5850 for Nifty. On the downside, support for Nifty Spot comes at 5685/5675 levels. Below 5685, another round of selling can take Nifty to lower levels of 5645/5650 and 5625/5605. Hence, for tomorrow, 5685-5720/5725 is the immediate narrow range, breakout from which is expected to bring a good move.
2 April - Nifty Spot resistance at 5725-5770-5795-5820. Support at 5680-5650-5625-5605 - www.niftypower.com
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