Daily_Nifty_VP's View-30/07/13

LEADER POST for Tuesday (30/07/13)

1.         Supports are at about 5797, 5789 and 5728 while resistances are at about 5856, 5923, 5950, 5983 and 6040. Previous gap on lower side is at about 5816. Likely lower levels seem to be 5750 and 5630. However, 50wma is at about 5803 and nifty may take support around that level. Four +WWs can give about 5949 (once above 5828), 5952 (once above 5884), 6016 (once above 5950) and 6044 (once above 5939) (+WWs with higher targets are not mentioned as of now). A -WW can give about 5776 (-WWs with lower targets are not mentioned presently). A falling wedge break out can give about 6045 if nifty remains above 5850.

Nifty fell in spite of a gap down open and closed below 5850 and, particularly, below 200dma, which is clearly bearish. However, a +ve div is seen on lower TFs. Also, an imperfect morning star has formed in daily candle. To satisfy this likely bullish sign, nifty must close well above 5900 on Tuesday, preferably with a gap up open. About 5800 can be the SL for longs while about 5950 the SL for shorts, both SLs being on daily close basis. A close below 5800 can result in much lower levels. Oil price and INR will remain key to the future of Indian markets in the short term. High VIX can cause sharp swings. Only global cues and liquidity can prevent further fall. Tuesday being the RBI policy review and Fed policy being on 31/07, trade carefully.

2.         PCR flat at 1.0 and VIX up at 18.25. Pre-open data suggests an uncertain to +ve nifty after a slightly gap up open unless it remains below 5836 by afternoon.

3.         AS PER 9.30 STRATEGY, SELL ABOVE 5866NF, TARGET 5839, SL 5896.

4.         If SL is hit, buy below 5900NF, target 5927, SL 5870.

5.         SL hit.

6.         SL of reverse trade also hit.

7.         Target of original trade met.

8.         Target of -ww of the first post met.

9.         Nifty opened up with a slight gap and rose a bit before tanking after RBI policy review to make a lower high and low than those yesterday before closing strongly -ve and also below yesterday's close. In the process previous lower gap at 5816 was filled. The target of -ww of the first post was met. However, SL of 9.30 strategy trades were hit on either side before giving the original target.

The intraday chart of nifty spot values with 5 min candles is shown below.