Daily_Nifty_VP's View-02/08/12

LEADER POST for Thursday (02/08/12)

1.         The supports are at 5238 and 5229 while other levels to watch are 5154, 5077 and 5032. Resistances are at 5246, 5252 and 5263. Nifty is struggling to cross recent highs of about 5257 (19/07) and 5267 (13/07). Four likely -WWs give about 5229/21, 5207, 5127 (once below 5189) and 4988 (once below 5220). Two likely rising wedges give appx. 5155 and 5077, if they break down.

As mentioned yesterday, nifty now seems set to break out above crucial level of about 5250 or break down below about 5150 as indicated by above mentioned -WWs and rising wedges. If Wednesday's outcome of FED meeting is good, we may see a gap up opening on Thursday but previous highs will pose resistance. If they are taken out, the gap created on 12/07 (5306) could be filled up.

2.         (Post by LLK) -ww target of 5229/21 NS achieved.

3.         (As per ) 09:30 strategy, SELL 5235 NF target 5209 SL 5265.

4.         A falling wedge break out gives 5242NS while a +ww gives 5247.

5.         +ww target raised to 5255NS.

6.         Note that NF stopped at an important "number" 5252. If it crosses it, it becomes a buy as per that number theory. Also, if and only if ECB news is good, we may see a gap up tmrw and further rise. All short sellers will be killed then. That's why I said don't fight liquidity. At the same time, if there is no good news from ECB, nifty may not crash although will surely react. I feel it may be a good idea to have a hedged position by end of day if NF/NS doesn't seem to be closing above 5252/5247.

7.         we may see nifty closing so that we see a plus/minus 150 point move tmrw (onwards) depending on ECB news and how global markets behave.

8.         Nifty once again opened slightly down, made a lower high and low than yesterday and also closed -ve and below yesterday's close. Target of one -ww was met while that of second was just missed by 3. However, like Wednesday, neither the target nor the SL of 9.30 strategy was triggered with nifty remaining in a small range of 25 points, clearly waiting for news from ECB today evening.

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