December 5, 2013

NIFTY breaks out from range but closes at day's low

NIFTY breaks out from range but closes at day's low. The closing was above the range which is a good sign but closing at day's low indicates selling at higher levels. On the plus side, VIX dropped by 8% thus showing diminishing fear at current levels.

Option writers have flipped and now highest open interest (OI) is at 6500 call option. There was an increase in 6200 put OI and a cut in 6000 put (OI). Difficult to read this.

The high of 2013 at 6332 is now within striking distance.

Today's closing also means that we have closed above last week's high and recent swing high. Close above swing high means that if you were positional short, then you should have exited today. If not, your next/ last SL is 6332 spot (say 6350 spot).

Intraday charts point to selling throughout the day... the high of the first 5 min was never  crossed. The selling was at best weak as previous breakout level has now started offering support.

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