Is it time to panic?

If any body buying Puts or Calls of Nifty after 20^th November 08, and holding it must be suffering from time wise decay in the value. At this time writing out of money calls or puts can be beneficial but it requires higher margins. Nifty has been trading in the range 20^th nov. low 2503 and 8^th dec. high 2862. Since 20^th Nov in 12 trading session no significant increase or decrease in volume witnessed. A positional trader will have to wait for a decisive break out.

If we assume no break out soon, then the followings will be important levels for nifty to watch out.

2503, 2588, 2640, 2682, 2725, 2777, 2862.

Break out above 2862 can lead up to 3080 and break out below 2503 can crash up to 2280. For near future I do not hope for higher high above 3241.

For 10^th December 2008, we may see some initial panic and then a smart pull back. I expect the opening in red at around 2777 levels and panicking up to 2682 levels. If nifty manages to close above 2725, it will be a concern for the bears and a comfort for the bulls.

Pivot point support and resistance.

Support – 2712, 2640. Pivot – 2787. Resistance – 2859, 2934.

Will the party continue???

Today we witnessed a classic example of Fibonacci retracement. Today nifty made high of 2862.00, while the golden number was 2863 - 61.8% Fib ret. Of the range 2253 – 3241.

Bulls will party for sure. How long????

Since September we have witnessed that bears hammered down the market around 20days EMA. This is the fourth attempt by the bulls to surpass the 20days EMA. In the same way most of the premier global markets too faced stiff resistance around 20days EMA since September. Now most of them are too trading around this mark. European Markets are looking more weak than other global markets, hence we may see profit booking after the European markets open.

If we see a rhetoric gap up opening immediately we will see some hammering. But I am afraid there can be a bear trap if not able to cover shorts soon. As mentioned earlier the bollinger bands contraction indicating some volatility in coming days. If nifty does not break 2745.00, bulls will have more hopes. Gap up around 2785.00 and closing further up will be great support for the bulls. Bears should close their positions and can wait to open them for some time. There can be stiff resistance near 2900 levels.

There is no doubt that we are in the bear market, so the painkillers given by the Government will subside the pain for some time. How long, that is to be seen. But for now Bulls will have a party.

Will the making continue?

Heavy Put writing witnessed in Dec 2600 PE.

Heavy unwinding witnessed in Dec 2600 CE.

2863 - 61.8% Fib ret. of 2253 - 3241

20day EMA - 2792

Close – 2788.00

20day SMA - 2781

20day TMA -2757

20day WMA-2726

ADX bullish, MACD positive, Ultimate Oscillator bullish.

Nifty today was successful to climb up some of the weak resistances. It is to be seen how long it can sustain above it. It will be better if it can spend considerable long time, as it can help to lift up this support (earlier resistance) levels.

Warning – Fast Stochastic can turn into sell mode at any time and give a knee jerk. Par. SAR not supporting the bullishness. Bollinger Bands contracting which can throw in high volatility soon. Within last three months nifty have fallen from 20day EMA (now 2792) which is yet to be conquered. So please be careful with your longs and cautiously go short.

Bears can return with great vengeance.

Make or Break soon.

Now the situation in which we are, is such that very soon we may see a make or brake kind of situation. Today Nifty made a Doji, showing the great level of indecisiveness. If any good announcement comes out from government, then we can see a good rally, otherwise there can be significant downfall. It is now out of my imagination, that if there is a fall at what levels can this fall lead. Other wise earlier I was of the opinion that 2253 may not be tested atleast in December.
Today Technology did not lend a support other wise it would have been a different day. Laggards of previous week like Tata Steel, State Bank, DLF, Maruti, PNB staged back good recovery today. For tomorrow if the big boy Reliance stages a rally and if Nifty does not give up 2655.00 then it will be a discomfort for the Bears.

• Resistance levels.
• 2727 - 20 day WMA
• 2780 - 20 day TMA
  
• 2793 - 20 day EMA
• 2799 - 20 day SMA
• 2863 - 61.8% Fib retracement of the range 2253 - 3241

SUPPORTS AND RESISTANCES obtained by PIVOT POINT ANALYSIS FOR CNXNIFTY

WHERE PIVOT POINT is 2654.02.

	DAILY For Next Day
RESISTANCE 1	2,696.08
RESISTANCE 2	2,735.72
RESISTANCE 3	2,777.78
SUPPORT 1	2,614.38
SUPPORT 2	2,572.32
SUPPORT 3	2,532.68