On Friday, Nifty Future made its consecutive eighth Down bar on Daily charts, and closed near 5700 level. It also formed a new low on Friday. The zone of 5670/5690 is the close of the biggest Bear Bar this year, that was in February. It is the lowest level for Nifty Future on monthly closing basis. Hence, after a continuous losing streak of eight days, some respite for Nifty Future can be expected next week. The short term trend remains down at least till Nifty Future is not able to give a close above recent swing high of 5841. For Positional traders, this should be the Stoploss for the Short trade. However, since Nifty Future is well below the Stoploss level, and a bounce may be expected soon in Nifty, safe traders can take some profit off the table, and wait and watch for the bounce at least for the first half of next week. Thereafter, a re-entry may be taken in the short trade, either on a bounce till some resistance level on the way up, or if the bounce does not materialize, then a break of supports near 5670 or 5630 will be a short signal. But as of now, mantra for the Safe Trader is "Sit on the Sidelines and Watch".
The Nifty Options Open Interest Charts are given below:
In Nifty Options, both the Bulls and the Bears built up some positions on Friday. While for the Bulls, 5600 PE was the strike in focus, where they added 10 lacs+ Open Interest, for the Bears, it was 5700 CE, where they added 11 lacs+ Open Interest, Overall, although the Option Charts are still developing, the Bulls can be seen building supports by writing Nifty Put Options of 5600 and 5700, while the Bears are building resistances by writing Nifty Call Options of 6000 and 5900/ 5800 strikes.
For Monday, immediate resistance for Nifty Future now comes around 5720 and 5735 levels. Above this, Nifty Future will face stiff resistance near 5750/5765 levels. Only on closing above these resistances, can the Bulls hope for some sort of Pause to this downtrend, and maybe a relief rally till 5795/5820 and 5845 levels. On the downside, support for Nifty Future comes at 5690 and 5670 levels. Below these levels, the Bears will continue to press Nifty Future lower towards 5635 and 5605 levels. For Monday, any long trade will not be advised if and till the time Nifty Future trades below 5700 level.
5 Aug - Nifty Future resistance at 5720-5735-5750-5765. Support at 5695-5670-5635-5605 - www.niftypower.com
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