Daily_Nifty_VP's View-25/10/13

LEADER POST for Friday (25/10/13)

1.         Supports are at about 6144, 6110, 6075 and 6049 while resistances are at about 6178, 6215, 6269 and 6312. Two +WWs can give about 6232 (once above 6140) and 6295 (+WWs with higher targets are not mentioned as of now). Four -WWs can give about 6095 (once below 6150), 6066 (once below 6182), 6031 (once below 6221) and 5990 (once below 6162) (-WWs with lower targets are not mentioned as of now). Break down of few rising wedges/channels can give about 6030/5880/ 5825/5700 if nifty goes and remains below 6144.

Nifty reacted sharply after a new 3 year high to close below 6200 again and seems to be heading south. A -ve div is seen on daily and weekly charts. The daily candle is a (gravestone) doji and an inverted hammer, likely reversal signs. To defeat them, nifty must close +ve, preferably above 6205 and particularly with a gap up open. If nifty takes out 6280, it may head towards an all time high. If it closes below 6130 and then 6030, it may fall much more. Oil price and/or INR can play spoilsport any time and will remain key to the future of Indian markets in short to medium term. VIX is still moderately high and can cause sharp swings. Only global/local cues and/or liquidity can take nifty further up.

2.         Pre-open data suggests a +ve nifty after a small gap down open unless it remains below 6154 by afternoon.

3.         AS PER 9.30 STRATEGY, SELL ABOVE 6137 NF, TARGET 6106, SL 6167.

4.         If SL is hit, buy below 6167NF, target 6198, SL 6137.

5.         SL hit.

6.         VIX is still high and we will see whipsaws.

7.         SL hit on reverse side also.

8.         SL hit again.

9.         Nifty opened down with a small gap and made lower high and low than yesterday. It closed marginally -ve and also below yesterday's close. Though the total range was <50 points, SL of 9.30 strategy was hit thrice on either side and neither side target was met. Daily candle is a doji.

The week’s chart suggests that further fall is likely.

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