Daily_Nifty_VP's View-10/10/12

LEADER POST for Wednesday (10/10/12)

1.         The supports are at about 5697, 5684/81, 5655 and 5633. Resistances are at about 5709, 5715, 5723, 5728 and 5849. Four likely +WWs give about 5728, 5760/66 and 5788. +WWs with higher targets are not mentioned as of now. Three likely -WWs give about 5693, 5650 and 5628 (-WWs with much lower levels are not mentioned presently). A rising channel can give about 5557 in case of a BD below 5681. A falling wedge gives about 5808 in case of a BO while two rising wedges can give about 5640/5557 in case of a BD.

Daily nifty candle on Tuesday is a Doji and that too an inside bar thereby giving a Harami Cross. Since this formation is in a downtrend, it indicates possible reversal to uptrend if nifty opens on Wednesday above 5709 and closes +ve, preferably above 5752 to begin with. For that nifty must take out previous highs of about 5715, 5729 and 5752. Hence, though the general short term trend is bearish, I feel nifty will try to go up on Wednesday again before reacting. Initially, 5684 and 5787 are two important levels to watch for judging the short term trend. A breakout above 5849 will ensure continuation of uptrend, which started in early Sept.

2.         PCR at 1.03 and VIX at 16.80.

3.         AS PER 9.30 STRATEGY, BUY BELOW 5704NF, TARGET 5735 SL 5674.

4.         The above is a reverse trade after SL for first "sell" trade was hit around 9.45. Be careful of volatility which can trigger SL on either side. Luckily the present buy is close to SL.

5.         If SL is hit, target 5649NF sell above 5681 SL 5711.

6.         SL hit. Now 5649NF possible unless 5711 is taken out before that.

7.         Nifty opened gap down but could not rise much. It reacted later finally closing -ve and also below yesterday's close. The targets of two -WWs mentioned in the first post were met while the target of BD of first rising wedge was missed by a few points. However, SLs of 9.30 strategy trades were hit twice but the target of reverse trade was not met. The daily candle gives signs of lower levels to come.

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