Daily_Nifty_VP's View-06/08/12

LEADER POST for Monday (06/08/12)

1.         The supports are at 5208, 5190, 5185 and 5168/67 while other levels to watch are 5154 and 5077. Resistances are at 5217/21, 5226/27 and 5240 while other levels to watch are 5247/57/67. An upper zone of strong resistance is 5286-95. Nifty has been struggling to cross recent highs of about 5257 (19/07) and 5267 (13/07). Two likely +WWs give about 5252 (once above 5206) and 5306 while two likely -WWs give about 5191 (once below 5212) and 5118 (once below 5209). The other -ww with lower level is not mentioned.

Nifty has moved in a very narrow range in the last few days. It is important to note that Friday's candle was once again a hanging man. Hence, it is important to see opening and closing levels on Monday to confirm the bearish signal of hanging man or otherwise. However, considering the way global markets behaved on Friday, we will most probably see a gap up opening on Monday and then the gap created on 12/07 (5306) could be filled up. But, as of now, nifty doesn't seem to have enough steam to go to much higher levels unless we see a series of +ve actions from the Govt.

2.         PCR at 1.11 and VIX at 16.12.

3.         Pre-open high/low 5260.85/5203.55 at while close at 5260.85. This is probably the first time in many days that pre-open closed at high. Though nifty has gone down once with such a pre-open, it was during a downtrend while it is opposite this time and hence nifty may move up today. But that will bring it close to strong resistance levels. So, be careful in your trades.

4.         AS PER 9.30 STRATEGY, SELL ABOVE 5267NF TARGET 5247 SL 5297. BUT BE CAREFUL IN VIEW OF THE BULLISH UNDERTONE.

5.         If SL is hit, buy immediately with target 5326/39NF and SL 5276. But no haste.

6.         Having crossed all resistance levels stated in first post, we need to see how zone of 5286-95 resists.

7.         Day's close above 5250NS is good, above 5267 is very good and above 5295 is excellent.

8.         I feel one should carry longs today.

9.         As stated in the first post, nifty opened gap up but then remained flat, possibly indicating distribution with rsi showing -ve div upto 15tf. As mentioned after pre-open, it could not cross upper resistance level of 5295. The first +ww target was met in the opening itself but the gap of 19/07 was not filled. It closed +ve and also above Friday's close but within the resistance zone. However, the fact that it closed above the previous high of 5267 makes it look bullish enough for a further rise.

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