Daily_Nifty_VP's View-30/07/12

LEADER POST for Monday (30/07/12)

1.         The supports are at 5096, 5086, 5071, 5027, 5001/5000 and 4964 while resistances are at 5106/08, 5134, 5141, 5167 and 5187. Two likely +WWs give about 5119 and 5154. The way nifty has behaved on Thursday (a big fall) and Friday (a big gap up and then sizeable fall) and the fact that it may open up with a big gap again on Monday, I wonder whether a bear trap is being created. This is because of a couple of possibilities mentioned below. Nifty seems to be in two channels since 11/7 and thereafter with lower and upper TLs limits at 5062-5167 and 5026-5134. Also, A falling wedge seems to have formed since 19/7, which, if true and breaks out, gives appx. 5250. To me, 5167 seems to be a crucial level now although 5187 is a good (age old) resistance. We can not forget that 29th June took out major resistance zone of 5170-5210 with a big gap up opening. Since nifty is critically poised, one needs to be careful with trading on either side.

2.         PCR at 1.02 and VIX at 16.44. Pre-open high/low at 5239.30/5070.95 and close at 5129.75. In the past market has been flat to -ve on such days except for one day when it went up.

3.         AS PER 9.30 STRATEGY, BUY BELOW 5173NF, TARGET 5195/5210 SL 5143. Buy is already triggered.

4.         Both +ww targets met. A (new) +ww gives 5158 again.

5.         The +ww target mentioned above was met earlier but the target has now gone up to 5177NS.

6.         The first 9.30 strategy target met and new +ww target also.

7.         A flag gives 5204NS unless killed below 5164.

8.         Second 9.30 strategy target met.

9.         As I had stated in the first post, nifty opened up with a gap and continued to go up, closing +ve and also 100 points above Friday's close, contrary to what was felt after the pre-open. It also broke out of both the channels as well as the wedge mentioned in the first post.

It made a high of 5205.70 i.e. near the top of the strong resistance zone. In the process, both the targets of the two +WWs as well as 9.30 strategy were met. Another +ww identified later in the day also gave its target. Even the target of a flag identified later was met.

Today's candle is similar to the one on 6th June. Also, the gap created on 23/7 was filled today. What's more the upper TL from 10/7 was also breached convincingly. In general, a satisfactory day from trading point of view, being trending.

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