NIFTY for 5th February

NSE:NIFTY   Nifty 50 Index
World markets were in green in the morning and that ensured gap-up opening and then with cautious steps Nifty climbed 271 points to close at 11979. The low was very near to open and close was very near to high- which shows how systematic was the rise. What contributed to such phenomenal rise, apart from positive world markets? Two news items, in my opinion, manufacturing PMI at almost 8-year high figure (55.3) and, Electricity supply breaks 5 month of decline to rise by 3.25% (YoY). Please check my video posted on youtube under channel name Market Movers India for slightly more exhaustive and analytical content.
FIIs and DIIs both were net buyers today. The final FII figures for yesterday show that FIIs bought in all segments –Equity, Index futures , and stock futures . Option Hain shows thatthere is heay PUT writing on strikes 11800, 11850 & 11900. Most impressive writing and Total OI is at 11900, so it can be assumed as a good support for tomorrow. There is no appreciable Call writing even though there is some decent total OI at 12000, 12100 & 12200. So actually, I will not rely on any strike price as a credible resistance, at least for tomorrow.
On daily chart now we see a strong green candle closing above 100 DEMA and inside Bollinger Band . RSI is now improved to 46.21 so we are now not in oversold zone. So what do we do for tomorrow? There is one support and one buying area marked on 15 min chart where Nifty can be bought if it comes there. For selling, there is no resistance or selling area where one can attempt short sell. But one thing is certain- Nifty’s climb tomorrow, if it does climb just after opening, will not be as smooth and as unidirectional as it was today. So use stop loss.
All the best. Happy trading.

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