Daily_Nifty_VP's View-10/08/12

LEADER POST for Friday (10/08/12)

1.         The supports are at 5317, 5306, 5295 and 5289. Resistances are at 5324/27, 5331, 5336 and 5380. Three likely +WWs give about 5356, 5400 and 5426 while, on the other hand, two likely -WWs give about 5299 and 5274 (once below 5305). The other -WWs with much lower levels are not mentioned. However, 5289 is the bottom of a channel that has formed and I feel it may not be breached, except probably intraday.

Nifty reacted on Thursday due to poor IIP data. The daily candles for NS for last 3 days seem to have formed an evening star although not a perfect one. However, NF daily candles for last 3 days do not show such a pattern. Hence, the trend is uncertain/ confusing. It is still likely that nifty may fall further but as long as it does not cross 5260 on daily basis, I feel uptrend is intact. Remember that liquidity flow is strong with FIIs continuing to buy heavily. And hence trade cautiously.

2.         I forgot to mention that there is a -ve div on most indicators on daily charts and that's why the possibility that nifty may react a bit unless a strong upmove from tmrw negates it.

3.         PCR at 1.15 and VIX at 16.33. Pre-open high/low at 5322.95/5186.50 and close at 5308.20. Pre-open may indicate flat to +ve trend.

4.         AS PER 9.30 STRATEGY, SELL ABOVE 5326NF, TARGET 5301/5284 SL 5356.

5.         ………nifty chart seems to be forming cup and handle and if so, it will break out. If it is true and breaks out target is 5380+330 on lower tf and 5350+580 on daily charts.

6.         SL of 9.30 strategy triggered. Now buy below 5351NF Target 5381 SL 5321.

7.         First target of -ww already met around 1pm.

8.         Nifty opened down with a small gap according to global clues and closed slightly +ve as indicated by pre-open data. However, it closed slightly below yesterday's close. The target of first -ww mentioned in the first post was met. However, the lower end of channel was respected with NS making a low about 5294.

The SL of 9.30 strategy was triggered but the target of reverse trade was not met. Nifty closing flat was a surprise considering that index heavyweight SBI was very weak, thereby showing that liquidity was high.

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