Daily_Nifty_VP's View-01/08/13

LEADER POST for Thursday (01/08/13)

1.         Support is at about 5726 and 5703 while resistances are at about 5758, 5807 and 5950. Three +WWs can give about 5859 (once above 5791), 5923 (once above 5850) and 5957 (once above 5874) (+WWs with higher targets are not mentioned as of now). A -WW can give about 5577 (-WWs with lower targets are not mentioned presently). A falling wedge/channel break out can give about 6045 if nifty remains above 5778.

Nifty recovered after a gap down but could not above 5750 and is clearly very bearish. Monthly chart is bearish showing -ve div. However, a +ve div is seen on lower TFs. Also, daily candle is a hammer cum long legged doji cum imperfect morning doji star, a likely reversal sign. To confirm reversal, nifty must close on Thursday well above 5755, preferably above 5796, preferably after a gap up open. Higher levels are possible only if it closes above 5900. A close below 5723 can result in much lower levels as weekly support lies at 5612/5548. Oil price and/or 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.

2.         Pre-open data suggests a +ve nifty after a gap up open unless it remains below 5777 by afternoon.

3.         AS PER 9.30 STRATEGY, BUY BELOW 5800NF, TARGET 5842, SL 5770.

4.         SL hit.

5.         Since SL is hit, sell above 5799NF, target 5755, SL 5829.

6.         Target of reverse trade met without giving chance of an entry.

7.         Earlier, target of original trade was missed by just 1 point.

8.         Target of reverse trade was met after getting an entry.

9.         Nifty opened gap up, rose further to make a higher high but reacted sharply thereafter thanks to problems on NSEL exchange. It barely managed to make a higher low than yesterday before closing -ve and also below yesterday's close. Volatility was so high that SL of 9.30 strategy trade was hit after its target was missed by only 1 point, then target of reverse trade was met without giving chance of an entry and then again it was met after giving a good entry.

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