Daily_Nifty_VP's View-10/09/12

LEADER POST for Monday (10/09/12)

1.         The supports are at about 5353, 5330/28 and 5265. Resistances are at about 5368, 5374 and 5405 while other previous levels to watch are 5399 and 5449. The +WWs with higher targets are not mentioned as of now. Three likely -WWs give about 5334 (once below 5347) and 5324/5310 (once below 5343) (-WWs with lower levels are not mentioned presently).

Nifty closed +ve with a big margin on Friday and then again +ve with a small margin on Saturday giving, in the process, the targets of both +WWs mentioned in the post for Friday. But, though it made a high of about 5366 on Saturday, it could not close above 5360 mentioned over the last 2 days. Also, it has now closed above the previous high on 28th August and I feel it may take some time to consolidate before making the next move.

The period till 12/13th Sept looks turbulent. I feel Monday may be -ve and a revisit to Friday's low is not ruled out. In the short term, unless nifty closes below 5307NS/5324NF, the trend is up. However, a close above 5374NS/5405NF is a must now for continuation of further upmove. An important aspect to note is that VIX closed at 14.76 on Saturday, it's lowest in at least 2 years.

2.         Pre-open high/low at 5644.60/5346.65 and close at 5361.90. THis may indicate a flat to -ve market.

3.         AS PER 9.30 STRATEGY, SELL ABOVE 5367NF TARGET 5343/24 SL 5397.

4.         NF reacted from just short of R3 level mentioned on Friday.

5.         Nifty opened up with a slight gap but the high made in the first 5 minutes was never crossed. It made a higher high and a lower low than that on Saturday and closed slightly +ve and also above Saturday's close. However, Nifty Futures closed -ve and also below Saturday's close. The range was very narrow of about 24 points. With the result, neither the target nor the SL of 9.30 strategy call was triggered.

Today's candle is an imperfect "evening doji star", which is a sign of trend reversal. Imperfect because the opening was only with a slight gap up. One condition for an evening star is that the candle prior to the star should have low volume. Hence, if the market does indeed go down on Tuesday, the purpose of the special trading on Saturday will be obvious.

The intraday chart of nifty spot values with 5 min candles is shown below. However, please ignore the gap down after about 1pm since it is because the website giving this chart hanged.