Daily_Nifty_VP's View-26/12/12

LEADER POST for Wednesday (26/12/12)

1.         Supports are at about 5846 and 5811 while resistances are at about 5858, 5906 and 5921. Other levels to watch are 5823, 5940 and 5965. Six likely +WWs give about 5878, 5886, 5916, 5951, 5968 and 5977 (+WWs with higher targets are not mentioned as of now). (other -WWs with much lower targets are not mentioned presently).

Nifty closed above 5850 but not above 5916 to confirm the likely morning star formed on Friday. However, the daily candle is a Harami, a likely bullish sign. It means nifty will at least remain lateral if it doesn't give a reversal. The short position is very heavy and if short covering begins, it will go up sharply. Also, it should be noted that it is yet to break below Oct high of 5815 and that the low of NF in Dec was 5838, which is same as the high of last expiry day. Nifty has to close above 5965 to become bullish. If nifty closes below 5823, it may become bearish. Nifty may be very choppy in the expiry week. Hence trade with strict SLs.

2.         PCR 1.05 and VIX 14.49. Pre-open high/low at 5865.65/5844.05 and close at 5864.95. This may indicate a +ve nifty after a small gap up open.

3.         AS PER 9.30 STRATEGY, SELL ABOVE 5848.50NF, TARGET 5826/13, SL 5878.50.

4.         If SL is triggered, buy below 5893NF, target 5915, SL 5863.

5.         SL hit, buy triggered.

6.         Target of first +ww met

7.         Target of second +ww met.

8.         Target of third +ww met.

9.         Nifty opened up with a small gap, remained in a very narrow range of about 12 points till about 11 am before making an upmove. It made a higher high and low than those on Friday and Monday before closing +ve and also above Monday's close, as indicated by the pre-open data. In the process, it gave targets of first three +WWs of the first post. However, the SL of 9.30 strategy trade was hit but the target of the reverse trade was met.

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