NIFTY DAILY

NIFTY DAILY
The nifty since 20th august has made 6 new high consecutively ( whenever new highs or lows are made consecutively they are called as record sessions in Japanese candlestick studies), generally a ongoing rally or fall tiers out after 7-8 record sessions and here we have had 6 record sessions, this along with a –ve divergence on daily momentum lines makes nifty a prime correction candidate, so as long as the trend line resistance of 4812 holds nifty is within the scope of a correction, the question is to what levels it could correct??
The 14 day 25 day and the Bollinger band average all are in the region of 4550-4520 (whenever such averages, fibo values, pattern support are clustered in an area that area becomes a “confluence target”, in other word the index/stock retreats or reaches out to the confluence area) so that makes the region of 4550-4520 a likely confluence target.
On the candle charts there is initial support at 4620-4534-4458.
NIFTY OI data
The 4800 and 4900 calls have significant OI (4900 in fact has more than 30 lac open positions that too so early in the series) suggesting heavy resistance at these levels. On the down side 4600 has 29 lac open positions and 4500 has 36 lac open positions (again so early in the series) suggesting strong support in the region of 4600-4500. It has been a personal experience that whenever such heavy positions get built up so early in the series one of the areas (resistance/support) is targeted fairly quickly, my bet is on the down side getting targeted first.