Friday, July 15, 2011

EOD Analysis for 15th July 2011 and Outlook for 18th July 2011

15th July 2011 represents a crucial date change in the Nifty financial calendar for 2011; taking into account the Full Moon today and the other macro-economic parameters, volatility was expected to be on the higher side; however, the activity was brief for the first hour and then some short covering after which Nifty had a pretty dull session;

I had mentioned in my post yesterday that some wild swings are expected on both sides and next week will be calmer; however as with the correction that got delayed by a week, we may be in for a couple of volatile sessions on Monday / Tuesday and then continue with more range bound sessions

Volumes were very low today and through out the day, the OI in Nifty futures was around the 24 million mark which prevents upside for sure but also limited the downside; Gold has cooled down slightly and is now quoting around 1579 dollars an ounce but still is pretty high considering that just 1 week ago, it had a range of 1485-1525 dollars an ounce; this indicates the panic amongst institutional investors and fund houses

The crucial levels still remain the same

For the Downside: 5408, 5440, 5480, 5532

For the Upside: 5580, 5608, 5655, 5690

The bull story can only progress further with 2 consecutive closes above 5740 which if it happens, will open Nifty for a retest towards 5890 levels - Probability = 1% [for 2 consecutive closes above 5740]

On the other hand, bears can rejoice only after 5408 is broken on EOD level; below 5408, we open for 5348, 5225 and 5177 - Probability = 1% [for close below 5408 on EOD basis]

Nifty is consolidating well in the 5408-5608 band and this is a good sign for the markets; I would still expect falls to be arrested within the 5480-5532 zone; there should be no reason to panic to the extent the 5408-5440 zone is intact on EOD basis; Sell on Rise still remains a preferred strategy and the volumes can be checked basis the information I had given earlier this week about Nifty OI requirements;

Banknifty is well above 11k which is a good sign; with disturbing news coming in frequently, seems difficult that Banknifty will cross the 11450 zone on EOD basis on the upside; on the downside, falls are getting arrested within the 11150 zone and the best strategy still remains 'Sell On Rise'; 11350-11425 zone is a good level to short Banknifty for July as it can assure a 100-125 point gain minimum within 3 to 4 trading days [most likely within the same day in current conditions]

From Monday, we will see higher roll-over figures for futures and those trading in Long Straddle Option Pairs should switch to August series Options from Monday; the best Straddle for August Series will be a combination of 5400 PE with 5700 CE 1:1 ratio [Stop Loss - 15 points on each leg and continue with the winning leg via TSL]

Stock Specific Recommendations will be posted over the weekend basis daily and weekly charts

Thanks for visiting the blog and sharing links with your near and dear ones; I hope you have been able to make some use of the posts and reap some profits for trading. Wishing all a very enjoyable weekend and a profitable week from Monday again


Govind said...

Dear Nagaraj,

Thanks again for your valuable insights. Its very helpful for all of us.

Thanks and Regards

jhanutaran said...

Tks nagraji for ur valuable insight n I presume mkt to go up from monday onwards