Daily_Nifty_VP's View-26/09/12

LEADER POST for Wednesday (26/09/12)

1.         The supports are at about 5669/63, 5646/43, 5640/38 and 5635/34. Resistances are at about 5679/82, 5691, 5723, 5744 and 5764. Two likely +WWs give about 5695/98 (once above 5673/70 resp.) (+WWs with higher targets are not mentioned as of now). Two likely -WWs give about 5652/20 (-WWs with much lower levels are not mentioned presently). A bullish flag on smaller tf and an another one on daily chart give much higher levels unless killed below about 5632/5605 resp.

Nifty is consolidating and closed flat on Tuesday. But, Tuesday's and Monday's candles have formed two consecutive inside bars to Friday's Mother bar. What's more, Tuesday's candle is also a Doji. Though these can be reversal signals, it is important to note a few things. Since 200 ema and "parabolic sar" show bullish trend, the upmove may begin again with a BO if Wednesday's candle crosses above 5703 and then 5720. It is interesting to note that even though Monday's candle was an inside bar, nifty did not crack on Tuesday and also closed above Monday's close, albeit slightly. Even if Wednesday's candle is also an inside bar, it may still indicate possibility of continuation of uptrend if nifty crosses above levels on Thursday."parabolic sar" show bullish trend, the upmove may begin again with a BO if Wednesday's candle crosses above 5703 and then 5720. It is interesting to note that even though Monday's candle was an inside bar, nifty did not crack on Tuesday and also closed above Monday's close, albeit slightly. Even if Wednesday's candle is also an inside bar, it may still indicate possibility of continuation of the uptrend if nifty crosses the above levels on Thursday.

However, nifty is near a resistance zone and indicators are near overbought level. Hence, if nifty crosses below 5652, it may break down further and thereby reversing the trend. Otherwise, it remains a "buy on dips" situation as of now. Liquidity continues to be very strong. But, since expiry is approaching, trade cautiously keeping the two important levels of 5703/5652 in mind and trade in Oct fut/options, if you must.

2.         PCR at 1.23 VIX down at 17.11. Pre-open high/low at 5767.40/5613.60 and close at 5653.40. This may indicate a flat nifty after a slight gap down open.

3.         AS PER 9.30 STRATEGY, SELL ABOVE 5646NF TARGET 5621 SL 5676.

4.         SL triggered but wait for (5 tf) candle close.

5.         Target of first -ww was met in the morning.

6.         So far NF crossed SL (5676) 5 times but 5tf candle could not close at/above it.

7.         Nifty opened down with a small gap taking global cues but remained flat within a range of about 33 as indicated by the pre-open data. It finally managed to close +ve but below yesterday's close. In the process, it created a third inside candle as stated in the first post. The target of first -ww mentioned in the first post was met soon upon open. Also, though the SL of 9.30 strategy trade was triggered 5 times, 5tf candle could not close above it indicating overall weakness.

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