Daily_Nifty_VP's View-24/09/12

LEADER POST for Monday (24/09/12)

1.         The supports are at about 5687, 5681, 5660 and 5588. Resistances are at about 5696/98, 5710 and 5733/38/43. +WWs with higher targets are not mentioned as of now. Four likely -WWs give about 5675, 5645 and 5633/25 (-WWs with much lower levels are not mentioned presently). A bullish flag with a mast height 142 gives about 5808 unless killed below about 5632. At the same time, a bearish flag gives about 5652 unless killed above about 5700.

Nifty broke past all resistances and previous levels in style on Friday. It made a 52 week high with hardly any retail participation. Also, most of this rally seems to be due to short covering and not only buying. This indicates that a further upmove is on cards. However, it may also consolidate here and also try to discount further bad political development, if any, considering that a -ve div has once again appeared on daily chart though not on weekly chart. Now, a daily close below 5600 will have to be considered to be first sign of weakness. Otherwise, it remains a "buy on dips" situation as of now. Liquidity continues to be very strong.

2.         PCR up at 1.25 and VIX up at 18.93. Pre-open high/low at 5733.45/5619.25 and close at 5691.95. The 10tf candle is a Doji and may indicate uncertainty and a flat to mildly -ve nifty.

3.         AS PER 9.30 STRATEGY, SELL ABOVE 5742NF TARGET 5685/66 SL 5772. Note that first target is reached. So trade carefully.

4.         Target of first -ww was met. NS is in a small ST with apex at 5692.50. I feel a BD/BO is due soon.

5.         A bearish flag may gve 5660NS.

6.         (post by LKL) Bearish flag almost reached.

7.         Nifty opened flat (though nifty fut opened up with a gap), remained flat and finally went down to close -ve and also below Monday's close as was indicated by pre-open data. The total range was only 46. The target of first -ww mentioned in the first post was met as also the first target of 9.30 strategy trade though, once again, opportunity for entry never came.

A ST identified during the day first gave a false BO but then retreated to give a BD and fell short of its target (5657) by 9, which may come on Tuesday. Similarly, a bearish flag identified during the day fell short of its target by just 3 and may too come on Tuesday.

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