Daily_Nifty_VP's View-29/08/12

LEADER POST for Wednesday (29/08/12)

1.         The supports are at about 5328, 5321, 5302 and 5298/93 while other previous levels to watch are 5309 and 5294. Resistance is at about 5360 while other previous levels to watch are 5399, 5420 and 5449. A number of likely +WWs give about 5352 (once above 5328), 5387 (once above 5354) and 5418/55 (once above 5369) (+WWs with higher targets are not mentioned). A likely -WW gives about 5310 (-WWs with lower targets are not mentioned). A likely inverted flag gives about 5285 unless nullified above 5370. A falling channel mentioned yesterday (with lower limit of 5294 and upper limit of 5315) seems to have broken out and may give about 5398 if it sustains. A likely falling wedge, again mentioned yesterday, also seems to have broken out and may give about 5350/5398/5450 if it sustains.

Nifty now faces a real test having closed below 5340 and a break below 5294 and/or daily close below 5302 will create real concern about immediate future trend. I am still bullish but now cautious. Volatility may continue to be high intraday due to expiry unless a definite trend develops from Wednesday. Nifty will have to give a major breakout this week to sustain its upmove for weeks to come. First sign of strength will be a daily close above Friday's high of 5399.50NS/5414NF in this week. Tuesday's candle is an imperfect hammer and may give trend reversal.

2.         PCR at 1.23 and VIX at 16.35. Pre-open high/low at 5578.45/5319.60 and close at 5343.85. The last time we saw such a high was in July. The pre-open may indicate a +ve trend, perhaps strong too.

3.         AS PER 9.30 STRATEGY, SELL ABOVE 5346NF, TARGET 5310/5289 SL 5376.

4.         (9.30 strategy) Target met. (The) ‎-ww target also met.

5.         The rising wedge breakdown stated in Monday's thread gave its target of 5295NS.

6.         Target of inverted flag stated in first post considered met.

7.         Nifty actually opened up with a small gap but that was the end of it. After remaining flat for 2 hours, it started sliding. It broke previous low of 5294 and 5290 stated in the first post and closed below it. However, it did not break 5280, considered by many as last stand for long holders. In the process, it gave targets of 9.30 strategy, the inverted flag and the -ww, the latter two mentioned in the first post. It also gave target of rising wedge breakdown mentioned in Monday's thread.

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