Daily_Nifty_VP's View-24/07/13

LEADER POST for Wednesday (24/07/13)

1.         Supports are at about 6057, 6030 and 6000 while resistances are at about 6090, 6107, 6157 and 6248. Three +WWs can give about 6094, 6126 and 6200 (+WWs with higher targets are not mentioned as of now). Three -WWs can give about 6038 (once below 6088), 6010 (once below 6066) and 5985 (once below 6096) (-WWs with lower targets are not mentioned presently).

Nifty rose in spite of a gap up open and closed above 6050 and seems to be headed upwards. Also, the mild -ve div seen earlier in RSI on daily chart has vanished. However, daily candle is an evening star and an imperfect inverted hammer, likely bearish signs. Hence, nifty will have to close at a higher high, preferably with a gap up open, to defeat it. Tuesday was a NR7 day. Repeated small range days have formed a "coiled spring" pattern and we could see a blow-out with big moves.

About 6050 seems to be a tight SL for longs but 6000 is the last SL. If 6150 is not crossed on Wednesday, expiry could be below 6100 but, if it is, then we could see 6200+ by expiry. If 6000 is breached, it could fall sharply. Oil price and INR will remain key to the future of Indian markets in the short term. VIX and PCR are expected to remain high and can cause sharp swings. Only global cues and/or liquidity can take nifty further up. This being an expiry week, trade carefully and book trades quickly.

2.         PCR at 6 month high at 1.38 and VIX down at 16.72. Pre-open data suggests a +ve nifty after a gap down open unless it remains below 6032 by afternoon.

3.         AS PER 9.30 STRATEGY BUY BELOW 6063NF, TARGET 6092, SL 6033.

4.         If SL is hit, sell above 6031NF, target 6001, SL 6061.

5.         SL hit.

6.         Target of reverse trade met but without giving a chance of an entry.

7.         Targets of first two -WWs of the first post met.

8.         Target of third -WW of the first post also met.

9.         Thanks to RBI's tough action, nifty opened down with a gap and kept sliding. It made a lower high and low than those yesterday before closing strongly -ve and also below yesterday's close. Targets of all the three -WWs of the first post were met. However, SL of 9.30 strategy was hit and target of reverse trade was met, though without giving chance of entry.

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