Daily_Nifty_VP's View-08/08/13

LEADER POST for Thursday (08/08/13)

1.         Supports are at about 5500 and 5415 while resistances are at about 5595, 5641 and 5740. A weekly TL is at about 5400 while the 100/200 wma are at about 5459/5437. Five +WWs can give about 5714/5723/5790 (once above 5588), 5722 (once above 5504) and 5739 (once above 5638) (+WWs with higher targets are not mentioned as of now). A -WW give about 5454. Three falling wedges/channels BO can give about 5695/5805/6045 if nifty goes and remains above 5550.

Nifty closed below 5550 once again and also at a new low and is scarily bearish, particularly noting that VIX made a new 52 week high. However, a +ve div persists on lower TFs and mild recovery is likely. Higher levels are possible only if nifty closes above 5630. Daily close below 5500 can cause further fall. Only a hidden divergence in daily and weekly charts can result in a recovery. Oil price and/or INR will remain key to the future of Indian markets in the short term. High VIX can cause sharp swings. Only global cues and liquidity can prevent further fall.

2.         Pre-open data suggests a +ve nifty after a slight gap down open unless it remains below 5510 by afternoon.

3.         AS PER 9.30 STRATEGY, SELL ABOVE 5533NF, TARGET 5510, SL 5563.

4.         If SL is hit, buy below 5570NF, target 5594, SL 5540.

5.         SL hit.

6.         Target met.

7.         Nifty opened up with a slight gap and after a minor hiccup, kept rising, thereby making a higher high and low than those yesterday before closing +ve and also above yesterday's close. The SL of 9.30 strategy was hit and the target of reverse trade was met. Though daily candle of nifty spot is non-descriptive, that of nifty fut is an inside bar.

The week’s chart shows that a possible recovery has started.

The intraday and week’s charts of nifty spot values with 5 min candles are shown below.