NIFTY DAILY

NIFTY DAILY
At last a break out though a tempered one but with “OK” volumes.
Good thing about the rise
1> The call writers are showing a tendency to cover up their positions along with the rise which shows their jitteriness about a possible momentum burst.
2> There is now decrease in NIFTY futures OI which shows a long build up.
3> RIL at last above its significant resistance of 2111
4> 4600 PUTS have OI above 60 lacs and 4500 puts have OI above 50 lacs and 4700 puts have OI above 44 lacs which indicate strong supports at those levels.
Things to be careful about
1> 4900 calls still have significant OI which suggest good amount of resistance at those levels.
2> IVs are at the lower range so if they increase then the volatility in daily movements will increase which can cut SLs on both the sides
3> RSI hasn’t given a new high and has reacted from its resistance line
4> Momentum line also showing a bit of –ve divergence but its near support

Personal view
A dip in the range of 4700-4650 if it happens is a dip to create short term long positions.
The SL for short term long positions in stocks can be 4500. We might be headed towards 4900 -5000 if the covering by call writers is any indication.