Wednesday, July 6, 2011

EOD Analysis for 6th July 2011 and Outlook for 7th July 2011

Volumes still remain a major concern for Nifty; despite some movements on both ends, Nifty futures OI were pretty constant throughout the day and at same levels as yesterday.

Banknifty was expected to get some fresh supply towards 11450-11500 levels before falling; rather what happened was a fall from 11,425 levels itself all the way down to 11,260 levels with some upside coming later

Nifty gave EOD above 5608 as expected; This is the 5th consecutive day Nifty has given close above 5608; I expect this to be breached tomorrow; however, if 5608 is not breached at EOD tomorrow, I expect 5608 to remain stable till the end of this week and the fall may commence on Monday 2nd half or Tuesday

I am certain of Nifty testing 5500-5532 zone in July series itself; I was expecting it this week itself; with 2 more trading sessions to go, remains to be seen how things pan out; winning strategy will be Sell on Rise; 

Recommendation for Nifty Futures : Shorting levels are 5655-5690 for 1 tranche (if not opened already) and below 5608 for the next tranche

Recommendation for Banknifty Futures: 1 tranche in the 11350-425 zone and next tranche below 11250

With 2 more trading sessions for this week, one should not invest more than 20% to 25% of trading capital in Puts - best bet still remains 5500 PE within 50 rupees as buying price for a target of 80 to 100 rupees within next 5 to 8 trading sessions

Nifty may try for 5655-5690 once aided by possibly some longs but there will also be a lot of shorts in the system the moment Nifty crosses 5655 on spot value and a lot of shorts expected in Banknifty in the 11350-11425 zone now

For a sustained move above 5690 on EOD basis, the OI in Nifty must rise to 27-28 million at least rather than current levels of 23 million

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