Nifty View for 31.07.2013

Nifty futures had a another down day with lows at 5787.30 and closed the day at 5803.10. Today's high was at 5905 which was open invitation for shorts for intraday which below yesterday's high of 5924.(Series of lower tops at 6099,6029,5974,5924,5905 excellent shorting opportunities for a keen eye followed by lower bottoms at 6006,5935,5907,5787). We had our monthly pivot at 5923 and critical level for any recovery move to start. We have our level one support at 5739 which is important after hitting the level one resistance at 6091( actual high at 6139.85) earlier. So below 5739 we see downtrend continuing for this time frame with intermediate supports coming at 5655 on monthly levels.

Nifty 4 hourly chart with MM levels we have nearly hit the 5781 level (actual low at 5787.30) which was support. So use this level as pivot with resistance at 5859 and support at 5703 on this time frame.

Nifty futures hourly chart show we could not the middle green line and was negative for the day. We have hit the yellow channel bottom. Breaching the yellow channel could lead us to bottom of lower green channel. RSI divergence has not worked but MFI is still showing a big divergence on this time frame. Also MFI is the early one to give divergence so we need to watch price carefully on this time frame. RSI is bottoming out near the past lows, so risk reward ratio for shorts has reduced drastically. The fall is of 352 points against the rise of 535 points a retracement ratio of  66 percent i.e 2/3 level approx. But the fall is at a faster rate in 5 days so the momentum is on the downside. So use stop loss for your trades prudently and as per your risk appetite.

Intraday traders can use the levels on spot nifty given below to trade on Wednesday.

Spot Nifty Levels for Trading on Wednesday :

No trade between 5736 and 5774(To avoid whipsaws)

Buy above 5774 sl of 5754

targets 5793-5812(add positions, breakout on the upside),

5831-5850-5869-5888-5907.

Sell below 5736  sl of 5755

targets 5717-5698(add positions,breakout on the downside)

5679-5660-5641-5622-5603.

Happy Trading !!!